Continue reading »]]> As much actual tension as there is between physician groups and ACOs, they share a common weakness.

From the smallest multi-provider group to the largest “alignment” entities, their real value isn’t in leases, equipment, or payor contracts, it’s in the knowledge, skills and experience of their professional employees – specifically, their physicians.

That value walks out the door every evening. There’s no guarantee that it will return in the morning. 

Continued “loyalty” must be earned, not assumed, and can be temporarily assured only so long as you have taken steps to create legal structures within which to hold it.

For hospitals and their ACOs, the issue is bleak, as the dynamic is generally different from that between physicians and physician owned groups. Costing millions to structure and many more to operate, it’s likely that ACOs will be unable to retain their physicians long term — at least their excellent physicians — as their attempts to treat physicians as fungible will lead to many physicians considering the relationship as fungible. What if you built an ACO and physicians came, but then left?

For physician group leaders, this means a comprehensive program to retain the right employees, from creating the proper practice culture to incorporating provisions within employment agreements that provide both incentives and disincentives designed to encourage the longevity of the relationship. Even in states with strict policies against enforcing covenants not to compete, other, sophisticated legal strategies can be employed.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.advisorylawgroup.com 

Continue reading »]]> While on a website obviously aimed at the college student age group, I noticed an ad for a book by a well-known author. Below a picture of the book’s cover were the following words: “All of the words, printed on paper. Classic!”

This is an interesting signpost of the impact of what Joseph Schumpeter called creative destruction: Although e-book sales are growing dramatically, printed book sales, whether online through Amazon and its few competitors or at the remaining local bookstores, remains a vibrant business. But how long will that be the case if the next generations of readers find the notion of physical books quaint.

In similar fashion, how many patients will soon accept the notion that seeing a physician, as opposed to a technician, as antiquated?

As you’re engaging in your Scenario Survey Process™, consider that as a highly possible future. Although it appears dark, there is light at the end of that tunnel for certain segments of the market and for certain physicians who desire to remain relevant in the context of patient care as opposed to in the supervision of physician extenders.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.advisorylawgroup.com 

Continue reading »]]> The common belief, and it may be quite true, is that change is the greatest cause of stress. But what if it can be used to your group’s advantage?

In the mid 1980’s there was a well known West Coast billing service that told its clients that they had only follow three simple rules to obtain success: Do the cases. Turn in billing information. Go home. Then, they would be paid.

Fast forward to today. Far too many physician groups have a business model based on that same philosophy. As the writer Robertson Davies said, “The world is full of people whose notion of a satisfactory future is, in fact, a return to the idealized past.”

Today, it seems as if change is accelerating at a faster and faster pace: ACOs, government interference, fraud and abuse witch hunts, your services as someone else’s “right,” national groups poaching your opportunities, hospital-centric healthcare, and a “system” not a market – these are just some of the bats hitting you as you run the gauntlet of daily practice.

But change in the healthcare industry has always been a given. It’s how you and your fellow group members react to the change that makes the difference.

If the change is feared – the fear of the unknown – then indeed it is a major cause of stress. So,if your group does nothing but engage in business as usual, then you will undoubtedly be victim to the winds of this change and, eventually, will be shipwrecked.

On the other hand, if you view the winds of change are presenting new opportunity, the opportunity to enage in practice in a way that previously, for ethical reasons or image reasons or economic reasons, was viewed as inappropriate, then change changes from fear to fuel.

The French got it wrong: The more things change the more things change. Use change to your advantage, to your success, and to your profit.

Mark F. Weiss

www.advisorylawgroup.com 

Continue reading »]]> In my podcast How Scenario Surveys Strengthen Group Strategy, or in my article by the same name, I discuss the importance of your use of the scenario tool in setting group strategy.

There’s another aspect of the Scenario Survey Process that’s important for any physician group that negotiates with a hospital, the classic example being the exclusive contract situation. That aspect is the use of the scenario tool at the micro level, for example,consideration of the various scenarios that can exist in terms of the personnel and relationships at a facility.

Take the instance of a group that has a tremendous relationship with the hospital’s CEO, with whom it negotiated five straight three year deals. What would be the impact of the CEO’s retirement?

As the earlier podcast and article stress, the Scenario Survey is essentially a large scale, macro planning tool. That doesn’t mean that it can’t also provide meaningful insight when used to drill down deeper into your group’s situation.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.advisorylawgroup.com 

Continue reading »]]> There is a complex interplay between hospital-based group exclusive contracts and ACO-entity payment mechanisms.

In addition to making certain that money flows into the group, as opposed to around it, obviously a protective move, there are significant planning opportunities in the play off between the managed care contracting provisions of exclusive contracts and the terms of hospital-controlled ACOs.

Things have become far more complicated but there are potential opportunities that you must exploit.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

www.advisorylawgroup.com 

Continue reading »]]> Growing up in the 1970s, parents urged their children to go to school, get a degree, and then work for a great company. Even kids who went into factory jobs heard a similar version of this story. You’d be set for life — the security — or so the story went.

Then came “right sizing” mass layoffs, business failures, and the winds of creative destruction that drove jobs offshore.

My point in this is that there is no real security in depending upon a pseudo-parent employer.

So why are so many physicians falling for this same story in regard to hospital employment?

Wake up. They’re not fooling you; you’re fooling yourself.

Sorry, it’s tough love. And, I’m not your daddy.

Continue reading »]]> Many physician group leaders look at events and circumstances impacting their practice as something that is happening to their group.

By definition, this orientation is external – on the something that is happening to them.

Instead, in this context, group leader orientation should be internal: it should be on what they as group leaders, together with their colleagues in their group, can do to have more control over their business future.  That is the key that distinguishes strategic thinking from its polar opposite, purely reactive tactics.

You may not have complete control over what others do, but you do have control over your group’s internal circumstances which control the impact others’ actions have on you.  You also have control over how you choose to react to whatever is done.

Create an overriding strategy for your group. Carry it out and create options for your future. Then when someone – the hospital, a competitor, the government – does something, you will have a plan or alternatives in place.

That’s certainly a lot harder than blaming someone else, but it is far more profitable.

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> In several of the hospital-based specialty practice areas, there are so-called national groups that are quite active in their marketing to hospitals at large. They run large ads, conduct well-planned webinar campaigns, and even telemarket to hospital administrators.

In particular, some national groups take a very sophisticated approach based around a campaign designed to convince hospitals to issue RFPs for their type services, while at the same time quite cleverly attempting to define what a winning proposal – theirs, of course – should look like.

This raises a very interesting issue: Should an entity that lobbies a hospital to issue an RFP be excluded as a matter of course from participating in the RFP process?

Is permitting an entity which lobbied the hospital to make the RFP decision to then compete for the contract an unfair business practice – or even fraud – as to the other competitors for the contract? It certainly seems to increase the odds that a disgruntled group will sue.

One thing is for certain: As RFPs become an even more commonplace occurrence in the healthcare market, their defects, both as to their structure and as to the RFP process itself, are certain to become an increasingly common subject of litigation.

Perhaps RFP will soon begin to stand for really foolish proposition.

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> “I’m just planning my practice’s new business.”

“I can’t devote any resources to its structure.”

“I just want a contract.”

Is it any wonder why physicians are such easy prey for “alignment?”

Please do a deal with one of my clients . . . please.

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> The expression lead, follow, or get out of the way has more than a kernel of truth to it.

Leaders must lead. They cannot bog themselves down in the morass of consensus building.

As the etymology of the word consensus indicates (with + thinking) it waters down decisions as a result of compromise and giving weight to the opinions of those who enjoy giving input but have nothing to back it up. That’s because consensus practitioners attempt to incorporate as many individuals into the process as possible, giving all equal input in an attempt to reach the best possible solution for the group. Consensus is compromise.

But why hinder your group with a watered down, compromise decision, especially one that takes time to reach, when the quicker cycling of decision making gives your group a distinct advantage in both the market and in negotiations with contracting opposites?

Note that I am not saying that leaders should not seek input and opinions from other members of the group, from the most senior to the most junior. That’s always valuable in that it helps develop new ideas, tactics and strategies. But that is very different from seeking a consensus among those queried.

The next time someone in your group suggests that you build consensus, remind them that the word starts with “con” and that they are just fooling themselves.

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> I’ve written previously about the power of framing – of creating context – to support your group’s position in negotiations. For example, framing negotiations around quality, not cost.

Or, as an example of the same argument coming from close to the polar opposite, consider the government’s argument that accountable care organizations are all about quality, not cost.

Related to framing is the power of the story, from the fairy tales that your parents read to you when you were a child to the story of your group and its meaning to the hospital, to referring physicians, to patients, and even to the community at large.

A few minutes before writing this, on a whim, I googled “who discovered America?” I found the popular stories of Christopher Columbus, claims that it was actually Leif Ericson or other Vikings, and others citing Chinese explorers. Or was it the Basques? Others pooh-pooh all this and say what about the Native Americans? But even they didn’t “come” from here – their ancestors came from Asia.

My point isn’t who discovered America but rather that there are a number of believable stories about who discovered America. People buy in to the story they believe and discredit the others. So the underlying truth really isn’t the point – no one can force you to believe; you do all the “believing” yourself in your own head.

Now, of course, it’s really not that simple because while someone can’t force you to believe, they can certainly create conditions that make it conducive for you to believe. That’s the whole point of advertising and sales – telling a story that resonates with you so well that you develop a coherent belief.

What story are you telling about your practice? If you’re not telling one, or if you’re not telling it convincingly, someone else is out there telling another story about you or your group that is likely to be believed.

These are not amorphous or esoteric concepts. They have real-world application. They are as much a part of negotiating your next contract, for example, an exclusive contract with the hospital, as is the face-to-face stage of negotiation when you’re sitting across the table from one another hammering out paragraph 47.

Abe Lincoln learned to write using a piece of charcoal from the fireplace. George Washington cut down the cherry tree and admitted it. What’s your story?

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> I had a quirky law school professor who, when the Socratic method was leading the discussion either in circles or to nowhere, fast, would throw up his hands and (almost) yell, “Hey, wait, let me drive the bus!” He’d then recenter the discussion to comport with his vision of the lessons to be learned.

For many medical practices, it appears as if no one is driving the bus.  Instead, the practice operates like a runaway bus — yes, the providers are seeing patients, but where is it headed? Instead of a map with a clearly marked final destination, it’s just rolling along.

Whether you’re a solo practitioner or the leader of a 500 person group, your most important job in terms of success isn’t patient care (that’s expected of you as the price of entry); rather, it’s owning the vision of your practice and its business. That is, it’s driving your own bus.

If you don’t take the wheel, your competitors, your employees, the hospital, the government, and the payors, would be happy to drive for you, but I can guaranty you won’t like the destination they have in mind.

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> I recently read an article about a physician who had sold his practice to a hospital. He was quoted as having stated that he had grown disenchanted with running the business end of his own practice, thus he had agreed to “have my practice managed by” the hospital.

From the article author’s viewpoint, this signals a disconnect between the physician and the hospital: it was more than management; the physician and the hospital needed to be more aligned as to the hospital’s goals and objectives to be met.

I agree that there’s a disconnect, but I believe that it’s on an entirely different level: the physician speaks as if he’s simply signed a management agreement in respect of his practice.

But the reality is far different: he no longer has a practice, it is owned by the hospital and he is simply an employee.

That is, for as long as he’s employed. . . .

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> Yin and Yang. Positive and negative. Heads or tails.

Two sides, inseparably linked.

Just like the far less obvious provisions of any agreement: term and termination.

Although this concept is most often experienced by physicians in the context of employment agreements and independent contractor agreements for their services, it is increasingly becoming an issue in the relationship between physicians and physician groups, on the one hand, and hospitals, on the other.

Let’s address the issue head on: No matter how long the stated term of a contract is, two years, five years, fifty years or forever, the true length of that contract must be determined in concert with its provisions for termination.  A seven year employment agreement or a three year exclusive contract with a ninety day without cause termination provision is, in reality, a ninety day agreement.

As more physicians leave true private practice for “alignment” with hospitals, whether as actual employees or via contract relationships such as management agreements, they must ask themselves how long will that relationship last.  And, even more importantly, what will happen, and “what are my options” when it ends?

Think of this as an exit strategy to what you thought was your exit strategy.

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> Over lunch one day, my son told me that he had recently bought a Subway sandwich from the location on his college campus at U.C. San Diego. He said that when he asked for olives, the guy behind the counter placed three small olive slices across the foot-long sandwich. When my son asked for additional olives, he said the guy put two more slices on it.

Had he like the product and the service, my son probably wouldn’t have said a thing about it to me or to anyone else. But when he received poor service, a crummy sandwich and no value for the money, he told everyone. And, importantly, he said that if he were hungry and had any choice other than a Subway store, he’d go somewhere else, even though he knows that each store is independently owned.

Of course, this is hardly a new observation – I’m not simply speaking about Subway sandwiches. After all, there are old expressions like “one bad apple spoils the bunch.”

But have you considered that the same effect applies to statements made, and actions taken, by members of your group? That one snide comment to a nurse, one rude remark to a patient, one event of tardiness, can become both a stain on your entire group and a broad brush with which to paint it?

There are multiple lessons for medical groups contained within the Subway story:

Certainly, you need to hire for competence. But you also need to hire for personality and the understanding that no matter what the medical specialty, it is a service business.

There is a need to manage personnel to meet high customer expectations, and that, of course, means that your group must have leadership and that leaders must be permitted the time,and incentivized, to actually manage.

And, your group’s owner and employee/subcontractor physicians must clearly understand the group’s code of conduct and customer service expectations, they must be trained to meet or exceed those standards, and they must be incentivized for good performance.

Of course, you do have a choice: you don’t have to take any of these actions. But then, your “customers” can eat somewhere else.

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> I remember watching my mother make bread – she always allowed time for the dough to rise before putting it into the oven; it’s a question of timing.

There’s a significant amount of timing involved in respect of the negotiation of agreements between physician groups and hospitals, especially in connection with exclusive contracts.

If the contract is to come “out of the oven” in 18 months, it’s time to start the levening . . . the negotiations . . . now.

The reason so many groups get only the crumbs, or worse, get sliced out of the picture, is that they confuse the final bargaining process — what I call the “face to face” stage in which the parties trade contract drafts and hammer out a deal, or not — with true negotiation, which in connection with a Relationship Contract™ involves the development of strategy and the deployment of tactics over a course of many months prior to the first “face to face” contact.

If you have to ask when it’s the right time to begin the contract negotiating process, the answer is “yesterday.”

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> Over the course of the past decade or so, carriers have ratcheted down payment and have begun a concerted shift away from compensating independent professionals to employing them directly at greatly reduced levels.

If you read the prior paragraph quickly, you might think that I was addressing compensation paid to physicians, but you’d be wrong. I was focusing on how insurance companies pay their most valuable business generating individuals, their own agents.

On the other hand, you’d still be right, because this is the same basic plan that is playing itself out in respect of the payment of healthcare providers, whether by insurance carriers which are adopting ACO-type reimbursement schemes, or by hospitals, which flipped with jujitsu like skill the business strength of physicians, seen a decade or two ago as the ultimate gatekeepers into the healthcare system, herding doctors into hospital employment at lower and lower compensation.

The future is bleak for independent insurance agents, who have to contend with salaried cubicle workers and online applications.

Unless physicians begin pushing back and begin seeking alternative structures for their practices, the future won’t be that different for you.

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> Several weeks ago, I noticed an acquaintance, “Dr. X,” driving out of the upscale shopping center near my house. I waived hello, but wasn’t sure if X had seen me.

Recently, X apologized for not having recognized me that day. He said that he’s uncomfortable when he goes to that shopping area and is so highly focused on leaving, that he doesn’t really notice what’s going on as he drives out.

I asked what made him uncomfortable about the shopping area. The response: “The ‘rich people,’ you know, like plastic surgeons.”

Confused and curious, I asked X what it was about the people at the shopping area that bothered him. The response: “They’re just so stuffy and pretentious.”

Although it is true that the shopping area parking lot sometimes looks like a Rolls-Royce and Aston Martin dealership, my experience with the people there is that they are as friendly or friendlier than the norm in the greater surrounding community: they generally appear happy, are smiling, and readily initiate or return a greeting.

So what is it about “rich people” that really bothered X?

X appears to have a moderately busy practice, but he is definitely not in the “rat race.” Previously, I thought that that was a choice, but perhaps the conversation revealed something else, that he does not want to become more successful because he will become like those “rich people” whom he clearly dislikes.

I’ve noticed a similar phenomenon many times in the course of dealing with clients in their business relationships. Oftentimes, individuals and groups seem to be putting on the brakes, not pushing on the accelerator, out of some mistaken belief that they occupy some fixed rung, as in a caste system, outside of which they are not permitted to tread.

The concept of accepted beliefs, in this case, of limiting beliefs, has been described as a mimeme, or “meme” for short. Just as X might be holding himself back because he doesn’t want to become like those “rich people” whom he believes are stuffy and pretentious, many internists believe that they are somehow “less than” the hospital administrator who tells then that the hospital-employed hospitalist will be seeing all of the internists’ in-patients. And, on a greater level, many physicians today are willing to fall lockstep into line with hospital-centric notions of healthcare.

Have you bought into these, or other, limiting beliefs, and are they holding you or your group back in your career and business success?

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> Why become a hospital-employed physician?

Scanning the news over the past week or so:

• GM lays off over a thousand workers.
• 900 bus drivers in Phoenix and Tempe are on strike.
• And around half of newly graduated residents and over sixty percent of established physicians moving to new jobs are placed with hospitals or their controlled medical groups.

So what could those doctors accepting hospital employment be thinking? That hospital employment is safer than traditional private practice? That it’s easier? That it avoids the difficulties of independent practice?

But as the industry news also reports, hospital closures are negatively impacting the physician employment market.

And, as I’ve written before, hospital employment comes with an additional “benefit” — a benefit to the hospital: The restrictions of fair market value compensation levels, as defined for healthcare compliance purposes, are neither fair nor at market value. They will result in lower and lower compensation as more physicians come under its purview.

Hospital employment is no cure for the ills of physician practice. And if you think it is, then consider that the cure is worse than the disease.

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> I recently heard it said that it while it takes both a chicken and a pig to make a ham and egg breakfast, the chicken is merely involved while the pig is fully committed.

How different is this from the relationship between hospital administrators on the one hand, and physicians on the other, in connection with the development of an ACO or another vehicle to bind physicians to the hospital?

Hospital administrators are merely involved in the process. They are in the chicken position. CEO tenure is often short and CEOs don’t tend to have owner or entrepreneur mentalities; they are managers – they will create an alignment structure, then get their raise, and then move on before the chickens come home to roost.

But for the physicians involved – involved in ACO structures, involved in acquisition of their practices or employment by the hospital – you’re being asked to fully commit: That’s the pig into ham position.

Not to stretch this story too far, but it’s entirely possible, actually more than probable, that the administrators will, to use the colloquial expression, lay an egg in respect of the ACO: in the long run it will fail, but those administrators will be long gone, moving on to other “success”. But you’ll be there, cooked.

So why is it that those merely involved are being allowed to shape the destiny of those who are being asked to fully commit?

Comment or contact me if you’d like to discuss this post.

Continue reading »]]> I recently spoke with someone, a former group leader, who will go unnamed.

It had taken him years to build up a successful hospital-based practice with dozens of physician providers. Over the course of those years, he worked hard to build what he thought was a strong relationship with the administration of the hospital at which the group provided services.  And, over the course of those years, he worked hard to keep competing groups at bay, protecting his group’s tenure at the facility.

But what the leader didn’t count on having to concern himself with was his partner; let’s call him Dr. Brute.

You see, in the course of a contract renewal battle, Dr. Brute cut a deal with the competing group, paving the way for the preservation of his job no matter who got the contract.  And, the other group did take over the contract, destroying years of work and tens of millions of dollars of value.

You protect your patients every day. You need to spend some time protecting the integrity of your group, as well. This process begins during the recruiting process. You need to recruit for integrity, not just medical expertise. You need to elevate to partner status only those individuals who are true partners, not simply wolves in sheep’s clothing, not conspirators in your own senate.

Et tu, Dr. Brute?

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Continue reading »]]> Time travel.

A joke? Or can you do the equivalent right now?

It’s a familiar theme in literature and even television. H.G. Wells’ The Time Machine. Quantum Leap. Even Dr. Who.

But this isn’t a post about science fiction. And it’s not a post about metaphysics.

It’s a post about determining where you are in your practice and especially the business of your practice. It’s about who determines that place, you or someone else. And, at its heart, it’s a post about losing the old lockstep notion of a career that, for physicians, can be traced back to elementary school — the notion of having to work your way up the ladder.

But why are you convinced that you have to work your way up the ladder step-by-step? Why can’t you simply jump, skipping ahead as many rungs you want, taking a quantum leap from your present position to another more desirable one? You can.

This has parallels in connection with the commoditized healthcare market we’re presently in. Some cower in fear, metaphorically and actually, of the creative destruction decimating medical group stability. But at the very same time, there are some physicians who’ve made tremendous leaps in respect of their success and in the success of their groups. They haven’t let societal trends dictate their future. This requires a different mindset. A mindset that you’re not trapped by the circumstances.

On an almost daily basis, I get personal emails, email threads, and listserve entries bemoaning the sender’s circumstances – it’s like a parody of senior citizens sitting around the pool, one out doing the other with stories of maladies and discontent. Yet at the same time, I’m dealing with a professional who is in his late 80s and who is planning his next big move with the mindset of someone in his 50s. He’s not playing the game – or rather, he’s playing his own game.

What game are you playing? What league have you put yourself in?

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Continue reading »]]> You worked both hard and smart for years and developed a successful practice, let’s say as a cardiac surgeon.

Although the expense of running an office is punishing, you’re actually running a true business and you’ve been able to make significant income.  In fact, you’ve been able to make well over $1 million a year in personal income.

But now the hospital approaches you and says that they are building an ACO – won’t you join with them and become an employee of their sponsored foundation or medical group? The pitch in part is that you’ll no longer have to bear the brunt of running a practice and, especially, of paying for those administrative costs, as there is an economy of scale across the entire managed group of physicians.

When it comes time to discuss compensation, you calculate, consistent with the hospital’s pitch, that a share of the administrative cost savings should accrue to you. So, instead of earning $1 million it should be $1 million plus.

The hospital is shocked — or at least that is what they feign. You’re told that even your $1 million is a fluke – that at the 75th percentile of fair market value compensation pursuant to their consultant’s survey, the highest level which at they’ll do a deal, the most they can pay you is in the $700,000 range. After all, they state with claimed moral superiority (and the prospect of banking $300,000 plus of your money), you do want to be compliant, right?

But of course, $700,000 is not as valuable as the million dollars you earned before. In fact, $1 million from the hospital is not as valuable as $1 million from your own practice. That’s because even though you had the responsibilities of running the business you also had the authority of running the business — you were the captain of your own ship. And, the term of an employment contract comes to an end. If and when that employment contract is renewed, compensation tied so-called fair market value will by definition spiral down as more physicians become employees of entities which are using valuation surveys to set compensation.

It’s a recipe for failure.

Contact me if you’d like to discuss this post.

Continue reading »]]> Psychologists and direct marketing experts (who really are applied psychologists) tell us that the fear of loss is a greater motivator of human behavior than is the prospect of gain.

Are you applying fear as a tactic in connection with your relationship with hospitals and other entities with which you have a Relationship Contract^TM in place?

As you’ll recall if you’re a regular reader, a Relationship Contract is an agreement that, as of the closing, creates an ongoing relationship between the parties. Its opposite is a Transactional Contract^TM, a deal that once it “closes,” the parties go their separate ways – think of the purchase of a home.

Note that when I talk of “fear,” I’m not addressing the use of threats.  Instead, I’m speaking of fear of loss as an underlying current to a broader publicity push in favor of your group – a part of laying the groundwork for contract renewal.

In the context of your group’s relationship with, for example, a hospital pursuant to an exclusive contract, the fear that can be harnessed includes the fear that your group will no longer desire to provide services at that facility, and the fear that you will pull back the added value services which you delivered over and above any contractual obligation in the course of your creation of an Experience Monopoly.

When deploying fear based tactics, it’s important that you focus on an already existing fear, one that hospital administration is empowered to act upon, and one that is relatively soon to occur or to be avoided. But on the other hand, the fear can’t be one that causes the hospital administrator to freeze like a deer in headlights – he or she will be too paralyzed to take constructive action.

Last, fear alone isn’t enough to spur positive action in your group’s favor:  You also have to drive home, hard, the fact that your group offers the complete solution to allaying those fears.

Contact me if you’d like to discuss this post.

Continue reading »]]> Physicians are certainly well acquainted with the concept of nosocomial infections, infections acquired by patients during the course of hospitalization and infections acquired by hospital personnel.

But physicians are for the most part unaware of another type of infection relating to hospitals: the meme, or mind virus, an accepted cultural idea or paradigm, infecting physicians in respect of the issue of healthcare itself: I’m talking about the mind virus of hospital-centric healthcare.

There is no legitimate reason, other than a grab by hospitals for control, why hospitals and their vehicles, such as accountable care organizations (ACOs) should be favored over physicians as the hub of the healthcare environment. In fact, the tremendous advances in technology resulting from the microchip revolution means that authority can be distributed among a broader segment of participants; in this case, physicians.

There is no need to “align” physicians with hospitals financially in order to align in terms of information and coordination of care.

So why do you believe there is?  Submit a comment or contact me if you’d like to discuss your response.

Mark F. Weiss

Continue reading »]]> You’ve probably heard the admonition to under promise and over deliver.

But what happens if you habitually over promise and under deliver? And what if it’s a central part of your business plan?

It’s become painfully obvious to subsequently disgruntled medical staff members and to subsequently terminated senior hospital administrators that the so-called national anesthesia and national radiology groups are incredibly adept at promising the world, but they often deliver less than a few square yards. I call this The Promise-Delivery Gap^TM.

Take this recent example:

An all Board Certified, all M.D. anesthesiology group is locked in an RFP battle. The competition: a so-called anesthesia management company, with no existing physician or CRNA personnel available, but full of promises – world class this, best-practices that, and outstanding providers, too! All that they were missing, in their viewpoint, was the demand for any stipend support, which of course clinched the deal for them.

So far so good.

A few months into the new contract the hospital was in disarray. Their Medicare certification was lost, but then regained. A rotating crop of locums providers passed through the facility — few of them stuck around or were even asked to. The hospital’s new cardiac program, on which it spent millions recruiting a new surgical team and building out its facility, wasn’t able to function due to the lack of cardiac anesthesia coverage – it took almost 6 months to do their first cardiac case.

And, the senior administrator who championed bringing in the new group due to the supposed cost savings that would result suddenly departed — the spin: that she had left to pursue other opportunities; the reality appears to be far different.

This is the central weakness of the so-called national groups. All image, but little substance. All hat, but no cattle. All promise, but little delivery.

Take advantage of it.

Contact me if you’d like to discuss this post.

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Why is it that some group leaders believe that simply having data on what their competitors might offer in terms of exclusive contract stipends, depth of coverage, and the like weighs heavily on their group’s own future?

This is incredibly limiting thinking.

Consider the example of car manufacturers. Certainly, there are commodity manufacturers, such as Chrysler. Those manufacturers are indeed concerned with their competitors’ pricing and features. Taken together, those manufacturers spend billions trying to convince you that a Dodge Ram is better than Chevy Silverado, and vice versa.

But then there are manufacturers like Lamborghini and Ferrari. They are competitors in an entirely different sense. Each produces cars aimed at a different segment of a very particular market. But even then, Lamborghini makes cars and chases buyers, while Ferrari won’t even make a car to ship to a dealer unless that dealer already has it sold.

On even a basic level, knowing exactly what your competitors have accepted as stipend support at other facilities doesn’t provide any truly useful information in respect of what the stipend should be at your facility. Averages are even more useless.

On a deeper level, believing that what your competitors might offer somehow controls your decision as to what you’re going to offer allows your competitors to tell you how to run your business.  Why not make it simple and just call them up and ask them what kind of response to the RFP you should submit?

The key is to turn the tables on the creeping commoditization of your specialty before you get to the RFP. Sell Ferraris, not Chevys. And if the hospital only wants to buy Chevys then you’re practicing at the wrong location. But that’s another story.

Mark F. Weiss

Continue reading »]]> Physician alignment is all the rage. But of course, as I’ve written before, hospitals use the line “align” when they’re actually a lyin’ to you. That is, unless the meaning of the word align actually is “to control.”

However, as is the case with much propaganda, there is a kernel of truth within the concept of alignment that physician group leaders must pay heed to: this is the fact that groups must actually align their delivery of service and the larger experience they provide to hospitals, referral sources, and patients with those parties’ needs; in fact, done right, that alignment should exceed their expectations.

This is not a difficult concept. However, it’s a concept that nearly every one of your competitors misses.

Stop making it so hard for you to succeed.

Mark F. Weiss

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Perhaps you’ve carefully structured your medical group’s relationships with hospitals, referral sources and other influencers. But did you pay attention to what’s going on inside your practice’s own house? Have you built a wonderful structure that’s being eaten up from the inside out by the group member equivalents of termites and wood rot?

It’s my experience, and it’s becoming an increasingly regular experience, that medical groups fail more often from problems within the group as opposed to solely from competition or as a result of attacks from outside of the group itself.

These problems range from group members whose misfeasance or malfeasance bring disrepute, to group members who engage in malicious activity outside of the pure scope of medical practice, to group members who actively consort with the hospital or a competitor to destroy or co-opt your practice.

None of the protections that are normally built into relationships between groups and outside parties are aimed at protecting the group from these internal risks.

To do so requires a different series of approaches starting with screening potential group members, whether employees or owners, on personality and interpersonal attributes as well as on medical expertise. It requires carefully evaluating, and not just on an annual review type basis, the members of your group and disciplining, or if required, terminating the “termites” before they destroy your group. It requires an entirely different set of protections built into your group’s internal documents, your shareholders or partnership agreements, employment agreements and subcontracts, in order to protect against more than what even those groups who are “benchmark to best practices” consider relevant. And it requires a coordination between those internal actions and the group’s relationships with hospitals and other facilities.

One disgruntled or malicious physician can destroy your $50 million a year business. Preventing the problem presents one of the best returns on investment you’ll ever receive.

Mark F. Weiss

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Is your practice a social service or is it a business?

These are two entirely different goals and if a definitive answer doesn’t immediately pop out of your mouth you’re in trouble. A dog may have four legs, but it can only walk in one direction at a time.

Today, with the communal notions of the “We” society in full swing, physicians are, in essence, being told by politicians, pundits and the press that you are in social services: They don’t see a healthcare market; they see a healthcare system, one that exists to serve the public, a significant portion of which believes that healthcare is a right and that it should be as free as air — or at least free to them . . . the “rich” should pay for it.

Of course, not everyone that says this believes it. Some say it just to get votes. Some say it just to get free stuff. And hospitals that want to herd you into an ACO or want to employ you at bargain basement (oops, I mean fair market value) compensation tell you that you need to economically align with them in order to deliver quality care to the public —  that’s our mission, isn’t it?

Now I’m not saying that you should not be focused on delivering quality care, but you first have to make the decision if, for you, you’re doing this as a viable business in which you have control over your future or whether you’re doing this as a cog in the wheel of the healthcare factory run by the hospital or the government.

If it’s the former, then you need to become much more active in conducting your practice as a business, both in order to compete with the large groups operating in many of the medical specialties which absolutely operate as businesses, as well as to push back against the trend toward the socialization of healthcare.

There is another alternative of course, there always is. And that’s that as opposed to going back to school, as so many physicians did, to get MBAs to understand how to run practices in the face of managed care, perhaps you should go back to school and get a masters in social work.

Mark F. Weiss

Continue reading »]]> Bully.

We’re not talking Teddy Roosevelt, we’re talking intimidation.

There’s been a lot of talk about bullying of hospital staff by physicians and even of bullying by nurses of junior staff and of younger physicians.  Hospitals, through their personnel function, and medical staffs, by way of medical staff discipline and physician wellbeing, are expected to police this behavior.

But what about hospitals that tolerate or even institute cultures of corruption, cultures that incentivise nurses and other staff members to intimidate physicians through incident reports that are judged administratively, outside of medical staff due process?

As the relationship between physicians and hospitals becomes more strained due to hospital-centric notions of healthcare, hospitals are becoming more coercive in thinning the medical staff ranks of independent physicians and twisting arms in order to get the other arms voting for closer “collaboration.”

Mark F. Weiss

Continue reading »]]> Sally hired Beth, the most sought after wedding planner in Centerville to coordinate her wedding at the Community House, a high-end hotel.  Beth planned the flowers, the menu and every other aspect of the ceremony and reception. You see, Sally had hired Beth for her expertise; the Community House was just the place, a nice place, where the event would occur.

But when the big day came, Sally, and Beth, were shocked to find that the Community House’s on-staff event manager changed the theme from sophisticated charm to down-home country. No more roses, but daisies. No more jazz band, but country fiddler.

This is the same experience that patients suffer when the post-surgical care that they expect to receive from the surgeon performing their operation is countermanded by a hospitalist hired by, or contracted to, and economically beholden to the hospital.

This is a growing issue for office practice physicians, who don’t view themselves as mere technicians but as actually having a physician-patient relationship with their patients. Hospitals, on the other hand, want to relegate physicians to technician status, so, sorry Doc, the guy we hired will take over your patient’s care.

We can argue back and forth, I suppose, over the two physicians’ relative positions (but I am right).

However, I consider the issue of what the patient expected to be of paramount importance.

If I wanted a team approach I would establish a relationship with a team from the outset. If I wanted a relationship with a surgeon and that surgeon needs a team and explains that to me then I would understand.

But for the hospital, or for the hospitalist, to make that decision should result in battery, a tort.

This is the future that were heading into if hospitals, pundits, and the prevalently popular politicians get their way. I will say “I told you so.”

Mark F. Weiss

Continue reading »]]> I was 16 and it was my third “real” job – working at McDonald’s.

It’s been, well, a lot of years, but the lessons learned on that job still stick.  During my McDonald’s training, I was bombarded with sayings that not only gave direction to the work level that was expected of me, but which transferred the organization’s culture:  ”When you have time to gripe, you have time to wipe.” ”When you have time to lean, you have time to clean.”

There’s a prevalent school of thought that professionals — physicians for our purposes — can’t be managed and indoctrinated culturally in the same manner as 16 year old hamburger flippers.  Why not?  Especially when the future success of your practice may depend on it.

Yes, I acknowledge that there’s an expectation of independent professional judgment on the part of physician employees and subcontractors that’s not encouraged by McDonald’s (which, for some reason frowns upon Sally whipping up a five patty Bigger Mac).  And, I’m not suggesting that you engineer out professional discretion.

What I am suggesting is that on another level, the level of how all physicians in the group present themselves to, and comport themselves with, referring physicians, other medical staff colleagues, hospital administrators and so on, makes an incredible difference in how your group is perceived.

The real benefit of that professionalism (or the abhorrent lack thereof) is that it creates valuable experiences that serve as a part of a larger strategy of providing an Experience Monopoly.

In turn, that Experience Monopoly goes a long way to cementing your group’s relationships which is money in the bank.

The process requires a global approach: it’s not just being clear on expectations, it’s teaching by example, it’s stimulating performance through tie ins to the physicians’s employment agreements, subcontracts and even the group’s partnership agreement or shareholders agreement, its regular reviews and mentoring, and it’s more.

Mark F. Weiss

Continue reading »]]> In my podcast on How the Downward Spiral of Fair Market Valuation Will Destroy Your Future, I discuss how valuation consultants’ refusal to opine at higher than the 75th percentile is taking the fairness out of fair market valuation and robbing you of your income.  

Continue reading »]]> Lewis and Clark, yes, that Lewis and Clark, the explorers, can teach medical group leaders an important lesson in respect of negotiating with hospitials.

Journal Entry September 2, 1803

“Suppose it best to send out two or three men to engage some oxen or horses to assist us [in crossing the sandbar] obtain one horse and an ox, which enabled us very readily to get over . . . . paid the man his charge which was one dollar [that’s about $350 in today’s money]; the inhabitants who live near these [sand bars] live much by the distressed situation of the traveler, are generally lazy, charge extravagantly when they are called on for assistance and have no philanthropy or conscience.”

What’s the lesson?  You’ve got no room to bargain when the seller knows you need a horse.

Likewise, there’s no room to bargain when the hospital knows that your group’s continued existence depends on getting the deal.

Mark F. Weiss

Continue reading »]]> The method used in determining most physician reimbursement, the resource-based relative value scale, or as it’s commonly known, “RBRVS,” is based on efforts, another way of looking at cost.

But the cost to deliver is not a measure of value.  It’s Marx. If effort creates value, then the plain old rock dug from a mine would be as valuable as the diamond pulled out at the same time.

The shortcuts physicians accepted in order to get paid, the Medicare fee schedule and unit based billing, are not tools to increase your earnings, they are tools to suppress your earnings.

Your value is not the input: the time or the effort. Your value is the output:  health and and life.

Work on receiving that value. That’s true healthcare reform.

Mark F. Weiss

Continue reading »]]> Many physicians, even physician group leaders, have trouble with the notion of transformational change because today’s payor and hospital centric status quo is their “normal.”

As a result, they’re consistently playing defense: rolling with the punches and hoping to survive.

On the other hand, the opposition, the payors who will join the government’s ACO bandwagon to cram lower reimbursement down physicians’ throats, the hospitals who are jockeying to put themselves in the position of doing the cramming, and the so-called national groups which are negligently, or in some cases, intentionally, helping to transition medicine from private practice to hospital controlled models, is highly organized.

I’m no psychologist, but it appears as if for many physicians there is a self-esteem problem combined with the harkening back to memories of prior transitions to new experiences. Yes, this may be highly irrational, but remember what it was like moving to a new neighborhood, attending a new school, or your first day of residency — every change, even a positive one, brought with it either some anxiety or a flood of new experience that was, even if exhilarating, exhausting.  And, for course, there is the uncertainty as to whether the new situation will be as favorable to you as the present. But you survived and, in many cases, thrived.

One thing is for certain and that is that unless physicians and physician groups evolve and take an aggressively proactive stance in constructing their future, the healthcare economy will take care of the evolving for you.

This requires a different mindset than the one that has gotten you to where you are today.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> In my October 3, 2011, post From Me to We: From Physician to Provider, I discussed the fact that today’s society is heavily affected by “we” think, from notions of shared sacrifice, to paying your fair share, to “giving back.”

The danger is that hospitals are using this trend to impose hospital-centric control over physicians and physician groups.

But there is a Situation Tranformer™ opportunity for physician groups:  harness the “we” trend to foster the continuation of the relationship basis on which groups have traditionally interfaced with hospitals.

The national physician groups putting pressure on hospitals are simply vendors – they are transactional negotiators — when society’s trend, and the hospitals’ calls for ACO’s and alignment are all symptoms of the “we” society.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Your group has held the exclusive contract for your specialty services, for example anesthesiology or radiology, for decades, but now the hospital is holding an RFP.

The competitors include the several national and regional management company groups, whose representatives, dressed in the uniforms actually considered the power costume by hospital administrators, well tailored suits not scrubs and lab coats, are scouring the hospital interviewing administrators, managers and the physicians who have, up until now, referred their patients to you.

You’ve had years to do the same: to create an experience monopoly – yet if you’re like most groups you haven’t and now you are witnessing a crash course. The price of admission might just be your career.

Of course, those “suits” don’t deliver patient care, even if they once did.  They are all sizzle and no steak. The problem is, administrators like sizzle.

In the long run, the sizzle is seen for what it is, sound and smoke, and when it clears away and patient care is at stake, administrator heads often roll.  That might just be cold consolation for you, as by then you will probably be long gone.

The solution is to deliver both the steak and the sizzle. You’re in the kitchen right now. Get cooking.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Just as conversations help frame contract discussions, conversations help frame the shape of entire industries.

Right now the frame in healthcare is greater cooperation between hospitals and physicians:  alignment, ACOs, direct employment, collaboration. The result of that frame?  Greater control by hospitals over physicians.

But there’s no reason why that frame can’t be hijacked to mean greater control by physicians over hospitals.

And, even more importantly, why don’t we change the frame? Quality not control. Physicians protect patients. Restore the physician-patient relationship.

Even if the frame can’t change be changed for all minds, change the frame for your mind – that’s a proven strategy for your contract negotiation.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Sometimes waxing poetic is the best way to stark realism.

Consider Robert Frost’s The Road Not Taken:

Two roads diverged in a yellow wood,

And sorry I could not travel both

And be one traveler, long I stood

And looked down as far as I could

To where it bent in the undergrowth;

Then took the other, as just as fair,

And having perhaps the better claim,

Because it was grassy and wanted wear;

Though as for that the passing there

Had worn them really about the same,

And both that morning equally lay

In leaves no step had trodden black.

Oh, I kept the first for another day!

Yet knowing how way leads on to way,

I doubted if I should ever come back.

I shall be telling this with a sigh

Somewhere ages and ages hence:

Two roads diverged in a wood, and I–

I took the one less traveled by,

And that has made all the difference.

Many medical groups are at a similar junction in their life, what I call the Great Junction™, with one road leading to commoditization and the other to creating an experience monopoly. The commodity route is the easy route – selling out to hospitals and national groups, protecting the bottom side and irrevocably capping the upside. The experience monopoly route is difficult, risky but potentially highly rewarding.

Unfortunately, it appears as if the commodity route will be the road more traveled.

But imagine yourself five years from now; what story will you tell about your group’s journey? What road did you take?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Hospital-based medical groups shouldn’t simply conceptualize their practice as one business.

If you’re a medical group leader, you must view your practice as consisting of several independent, yet coordinated, units, each of which requires a separate focus.

So, for example:

• There is a group owner unit
• There is an employee/subcontractor unit
• There is a hospital unit
• There is a referral source unit
• There is a patient unit

Then within each of those units there are multiple elements of required activity.

Finally, each of those elements are valuable only if they are working in coordination and within the scope of the group’s  master business strategy.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> First impressions matter, and this is more than simply a social rule.

Last week, a new notebook computer that we had ordered arrived at the office.  We have other computers,  from Macs and other Apple products to a number of PCs that we use for various functions.

In ordering the new notebook computer, my office administrator evaluated what it would be used for and chose a Dell over a Mac because of the programs it must run.  Because of our good experience with Mac products, especially their design and user interface, we knew there’d be a trade-off — but here’s the point about first impressions:

As I began to open the lid of the new Dell notebook for the first time — just an inch or two open —  I could see that the stickers placed on the lower right hand of the computer’s face were put on crooked.  What do you think my immediate impression was of the Dell?  Yes, that it’s sloppily and cheaply made.  My overall impression was focused through the initial lens.

What first impressions are you and your group giving to patients, referring physicians and hospital administrators?  What can your group do to construct, manage and exploit the power of first impressions?  Have you tied the creation of first impressions together with the provisions of your partnership/shareholders agreement, employment agreements and subcontracts, and the group’s compensation plan?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> When I first began practice, I worked for a law firm that represented clients in the entertainment industry.

One thing that struck me from each morning’s required reading, Daily Variety, was that although it carried many announcements of auditions for minor roles, stars didn’t have to addition at all – in fact, the paper often reported how many scripts some star was reviewing: the buying/selling or supply/demand situation was completely flipped.

It’s hard to imagine a more common service commodity than actors in Los Angeles – they are everywhere: waiters, secretaries, office support staff, temps, and substitute teachers; in fact some even work as actors.

But some have differentiated themselves and are no longer in the same, well, solar system, they are “stars.”

How different in this regard are most hospital-based physician group members from actors?  Most are stuck, at least in their minds, in the commodity world.

But if stars don’t have to respond to the acting equivalent of RFPs, casting calls and auditions, why don’t you create an experience monopoly practice and do the same?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> I recently heard of a consumer survey done at a hotel in which it was found that the guests’ impressions of every factor tested for, the quality of the service, the attractiveness of the rooms, the cleanliness of the common areas, etc., depended upon their satisfaction with the hotel check-in experience.

This is an example of confirmation bias – the tendency to look for and value things that confirm our beliefs and to ignore and undervalue those that don’t.  The guests who had a great initial experience saw every other element as being relatively great; those who had a poor experience saw everything else in that same shoddy light.

So what’s this mean for you?

Certainly, if you’re an office practice physician, it means that initial patient contacts, whether truly the first (a call to your front desk person from a potential patient), to a patient’s experience when she first arrives at the office, to how you greet her, sets the tone of overall patient satisfaction.  It also impacts the importance of the initial physical aspects of the visit – the neatness of your waiting area, factors such newer than seven year old copies of Consumer Reports with your home address cut off the cover, and the like.

For hospital-based physicians, generally without control over the physical environment, it makes the value of the initial patient contact even more important.  In connection with scheduled procedures, it opens the possibility of stacking the satisfaction odds in your favor through action taken prior to the first in-person contact.

And, for all, it raises the question of fairness in respect of any process by which your performance is judged or ranked.  Has someone (or can you) placed their finger on the scale?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Hospitals are happily benefitting from the expanding role of paraprofessionals and from the top level professional degrees, the doctorate, those paraprofessionals are now obtaining.

Take, for instance, the push by CRNAs to be recognized as equivalent replacement providers of anesthesia services.  Hospitals, seeking to break the financial and medical staff voting block hold of anesthesia groups, are often more than willing to accept CRNAs in place of anesthesiologists.  They view them as cheaper, more controllable and disposable.

If you’re not an anesthesiologist, don’t think this doesn’t apply to you — in a very real sense, anesthesiologists are simply the “canaries in the coal mine.” Soon, surgical PAs will be pressing for the ability perform some procedures unsupervised.

At the same time, doctorate degrees are becoming the top professional degree in many paraprofessional categories.  Once the nurse specialist performing your function becomes a “doctor,” you will become irrelevant – or so goes the thinking of hospital-centric healthcare pundits.

Physicians do have one important branding tool, the “M.D.” degree.  Of course, as paraprofessionals become branded as doctors also, the value of an M.D. will become diluted.  Physicians cannot allow that to happen and your professional societies must begin now in educating the public on the difference between M.D. delivered medicine and care delivered by nurses and other physician extenders holding doctorates.

Additionally, physician specialty boards, which to the public are generally meaningless (after all, what do all those initials after a physician’s name mean?) must devote significant resources to promote the public’s awareness of the high-level of training and peer-reviewed expertise required in order to earn that designation and, even more importantly, what that means to patients and their families.

It’s bizarrely amusing, in a sick sense of the use of that word, to see hospitals demanding that all physicians in a contracted group operating a hospital-based department be board-certified, while, at the same time happily replacing a significant portion of those doctors with far lesser trained nurses.  If medical specialty boards don’t understand this is an absolute repudiation of the value of board certification, and an attempt to render their members’ roles, and perhaps most if not all physicians’ roles meaningless, and therefore, fail to act, they, and you, will be in for a significant surprise.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> When’s the right time to begin negotiating the next renewal of your exclusive contract?

When I asked this question at a national conference of medical group leaders, the majority response was from three to four months prior to the end of the current contact term; a few outliers said 6 months and one, out of an audience of several hundred, yelled one year.

Not bad, they were all wrong.

The time to begin negotiating your next contract is as soon as the ink is dry on your current contract. Sign on November 28, 2011 for a 3 year term; begin negotiating November 28th for the renewal in 2014.

No, I don’t mean to set up a meeting with the hospital’s CEO to discuss the next agreement.

What I mean is that all of your group’s interactions with the hospital, from now to signing the renewal in 2014 are a part of the negotiation process, whether you choose to admit it or not.

Under those circumstances, you might as well harness the fact for your group’s benefit.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Running a hospital based group as “service” for the hospital, functioning as a sort of clearinghouse for income and expenses, severely limits your group’s future.

It limits the willingness, and the ability, of your group to pursue outside opportunities.  That’s chiefly because there is tremendous pressure to pass through to the owner, and often to the non-owner, physicians all available income, instead of immediately investing in, or creating the capital reserves necessary to pursue, other opportunities.

Additionally, “service” groups often suffer from the mindset that the group was formed to provide services at only that hospital, thus taking off the table completely the consideration of other opportunities, even if the group were able to deal with the notion of holding back what would otherwise be income available for distribution.

Of course, “service status” results in a severely weakened position vis-a-vis the hospital, which knows that your group’s very existence depends on renewal of its exclusive contract.  That is a horrible position for your group to be in, both in terms of the concessions that the hospital may demand, and that your group may be forced to give – not to advance its position in some other respect, but merely to save its own life.

You spend your professional life saving others, literally.  Why not save your own at the same time?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> I recently read that taken together, the value of all airline shares from the beginning of the industry to date would be a net loss.  Is anyone surprised?

On two recent connecting flights on the same airline, the customer experience was so wildly different that you’d think they were not only different companies, but on different planets.

The first plane was shabby, with a torn seat and service to match.

When the woman across the aisle asked for a ginger ale, the flight attendant retuned with a tray of drinks, and stopped in front of her.  “Is this ginger ale,” the passenger asked.  In response, the flight attendant scowled, “well, that’s what it looks like to me,” when a simple “yes,” would suffice and a simpler “yes, ma’am” would have thrilled.

The second plane is spotless and the service is excellent.  But what do I remember?  The bitchy employee on flight number one, and she wasn’t even talking to me; I just had to bear overhearing it.

You should have guessed by now that I’m not writing this for airline executives — I’m writing this for medical group leaders.  On a daily basis, your group’s physicians are likely delivering widely varying experiences to the group’s patients and perhaps to their families as well.  They are also likely interacting very differently with referring physicians and others.  Why?  What will the blowback be in connection with your next negotiation with a facility?  What referrals will you miss?

With many, many years devoted to medical school and then to post-M.D. training in the performance of the technical side of delivering patient care, you’d think that groups would be sensitized to the need for training in the interpersonal and communications skills that support it. The fact that this is not the case makes this the case for your group to implement it.

Hardly any of your colleagues at competing groups have any understanding of what I’m talking about.  Fewer still will do anything to implement it.  That’s why, for you, it will be like shooting ducks in a barrel.

What behaviors are expected by the group?  What phrases have you tested?   These are but a few of the questions that you need to start asking and then, when you have the answers, implementing.

In fact, ask yourself right now, is your group run as poorly as an airline?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> The economy is in shambles and some say we’re headed into a double dip recession.

The Medicaid population is growing and the ranks of well insured are declining.

As Baby Boomers age, the Medicare population is growing.

If yours is an average group, you’re doing more work for less pay.  Chances are, you’re being asked to cut back on your income and on your expectations.

But just like with the economy in general, cutting back is one approach.  Growing your group’s business and increasing its income is another.  And I’m not simply talking about doing more volume for less money, I’m talking about expanding its scope, creating different value and reaping its reward.

This is a wildly different approach that that advocated by most medical specialty societies, which for the most part bemoan the financial position their members have been “put” in, acting as self reinforcing loops of low self esteem.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Some see the future for hospital based groups in the context of large versus small, often stating that groups need to merge to achieve significant size or simply sell out to so-called national groups.  It not clear whether “sell out” means to be acquired or is simply a colloquial expression.

But large groups are like walruses in that when they get bigger they may more easily attract a mate, but what they gain in that respect is offset by the fact that growing too big makes them too slow to avoid predators.

The issue really is not large group vs. small — large does not equal better and small does not equal better; only better equals better.  The issue is what any group must do to increase the odds of its business success and relationship longevity, and that’s to create a unique experience, what I refer to as an “experience monopoly” tailored to each hospital that the group serves.

The “franchise operation” approach of large groups gives them an advantage in managing far flung outposts.  But that blessing is a curse in that they become too unwieldy and bureaucratic to ever truly deliver an experience monopoly.

At the same time, most small groups are too unstructured to provide it.

Groups of both sizes may be doomed.  Groups of both sizes may be successful.  Size in this instance doesn’t matter.  Better does.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> What do you know, really know, about the people you do business with?  For example, about your employees, subcontractors and the CEOs of the hospitals you deal with.

A few years ago a friend, let’s call him “C,” told me the following story:

C’s son, attending college in the East, was looking for a new roommate to share an apartment.  C’s friend said that his son attended the same university.

Instead of simply passing the kid’s name along to his son, C decided to do a bit of research first and, much to his amazement, found a treasure trove of information that, to say the least, disqualified the potential roommate, at least through a parent’s eyes.

Recently, the Wall Street Journal reported that some school admissions officers are using Facebook and other social media sites to discover information about applicants, searching for things which don’t match with the applicant’s statements made in the course of the admissions process.

Of course, this post isn’t about vetting roommates or potential students, it’s about gathering information in the context of your business dealings, where research of this sort is more than simply prudent, it’s required.

For individuals in general, this means you have to be careful about what you post on the Internet about yourself and about what is posted about you.  Of course, there’s a flip side to this:  you also have the ability to create your own “truth,” or mythology.

For physician group leaders, this means that you need to clearly vet, and regularly check, available public information about, and posted by, your group’s members.  You should also be checking the information that others have posted about your group.

And, extremely importantly, you need to develop a thorough knowledge base of your group’s business competitors and contracting/negotiating partners.  Even the smallest detail can often be used to your advantage.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]>

Top students quickly figure out that getting A’s requires delivering what the teacher is looking for, whether answers on tests or responses to questions asked aloud in class — they focus on the “correct” answer.

Setting aside the question of regurgitation versus critical thinking, top students focus on getting the answer right, on not making mistakes.

For physicians, as well as other professionals, that error-avoidance drive becomes hard coded into their careers.

But although risk avoidance and the focus on excellence serves you extremely well as a physician in terms of patient care, it hampers you in terms of group business success.

That’s because succeeding in business requires the exact opposite trait: the willingness to take risks and the understanding that risks unavoidably lead to mistakes. Those mistakes serve as the rocket fuel for learning what works and what doesn’t.

If you want to be a successful group business leader, you have to you learn to flip the switch: To compartmentalize your life into elements of both risk adverse clinician and as a failing forward faster entrepreneur.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> We hear a lot about “healthcare collaboration” these days.  ”Align with the hospital and make healthcare better and more affordable and better and more available and better, too!”

If you’re a frequent reader (see, for example, If Technology (and HIPAA) Drive Independent Healthcare Practice Why The Need For Physician Alignment, or The Problem of Perception – Healthcare Collaboration), you know that I see healthcare collaboration for what it really is:  a grab by hospitals for power and control.

“Healthcare collaboration,” as the term is used by its hospital-centric healthcare proponents, is a trope: a  figurative or metaphorical expression meant to transmit a condensed message.  The message they hope to get across is one of healthcare kumbaya in which doctors and nurses and pharmacists and respiratory technicians and all these other people who are giving wonderful caring help to so many sick people, work very closely with the hospital to deliver that care and never fight over the money.  Gee!

That’s a load of crap.

What the term really means is let the hospital hold all the money, let the hospital decide who gets to render the care, and let the hospital decide what those providers should be paid.

The choice of the term “healthcare collaboration” is ironic, in that the word “collaborator” has two meanings.  The scheme’s perpetrators see “collaborator” in the context of someone who works jointly on a project.

But recall that “collaborator” also means a traitor, someone who conspires with the enemy, as in “the healthcare collaborator was shot at dawn.”

Now before someone dashes off a nasty comment, I’m not suggesting that anyone actually be shot; I’m simply demonstrating the power of the trope as I urge you to use it:  ”Don’t listen to Joe, he’s just a healthcare collaborator.”

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> As a result of the prevailing trend of hospital-centric healthcare, in which more and more physicians are contracted with or employed by hospitals, the medical staff is quickly reaching a tipping point.

Soon, if it is not already taken place at your facility, a preponderance of medical staff members, or at least those who are active enough to vote and to serve in department and medical staff wide leadership roles, will be either employed by or otherwise dependent upon the good graces of hospital administration for their likelihood.

At that point, the medical staff will truly become what it has often been de facto, and that is a simple rubber stamp for hospital administration.

Consider the fact that the Joint Commission requires an independent medical staff.

Once the tipping point is reached is accreditation lost?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> 30 years ago, in order to practice law on a sophisticated level, you needed to be part of a firm with its relatively large support staff. You dictated and your secretary either took shorthand or transcribed the tape, typing away at a typewriter.

Flash forward to today — I’m dictating this post into Evernote on my iPhone from home, will polish it on my notebook computer in an hour or two and then upload it to the web.  Gone is the need for a large support staff.  Gone is the need to be in the same location.

In even more striking technological fashion, the microchip revolution that took place in medicine over that same time period enables physicians in independent practices and far-flung locations to share healthcare information and deliver technologically advanced treatment.  This technological revolution enables the coordination of care across locations, providers, and facilities.

This, in fact, was the entire underpinning of the need for HIPAA:  Information was going to be shared electronically among various providers and entities; therefore, standards for sharing the data were required and data security and privacy protections were adopted to make sure that sharing would be secure.

Yet over the past several years the pressure’s been to amalgamate physicians, under the control of hospitals, purportedly to coordinate care.  That flies in the face of the technological advancement that has rendered superfluous the need for common ownership and close financial relationship.

So then why “physician alignment,” and “healthcare collaboration” in the form of hospital-centric healthcare?

The answer is clear:  money and control.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> A few years ago I met a “plumber; ” he had taken over his father’s small company with a few trucks.  Over the course of less than a decade, he built it into a statewide service with hundreds of technicians and was expanding into the two neighboring states.

I asked him, we’ll call him Chris, how he found enough qualified plumbers to expand so rapidly?

He told me that he didn’t especially look for trained personnel – he hired employees for attitude and taught them to be plumbers.  He knew that his business was largely commoditized and found that the way out for his business was to provide a complete experience to his customers.  His edge – tidy, polite, clean plumbers.

Hiring for skill is not even half the battle for your group – the price of admission.  To set your group up to break free of the commodity trap, and to prevent your group from crumbling from within, hire for more than medical expertise.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Beginning in 2012, Medicare’s Value Based Purchasing program will  provide financial incentives based on the performance of quality measures. Patient satisfaction surveys will yield significant weight in measuring performance.

Many physician groups will make the mistake of focusing even more intently on patient care and on patient satisfaction.

Taken alone, focusing on increasing both the level of care and, significantly, the level of patient satisfaction, are important goals.  But in a very real way, they are simply an intensification of the “in your practice,” as opposed to “on your practice” focus that is damaging to your group’s overall success.

I can hear the complaints, so let me be clear:  Focusing even more so on patient care, to the detriment of other areas of your practice that also require devotion of quality “care,” is too much of a good thing.  Red wine, in moderation, a glass or two, has health benefits; drinking a few bottles instead of eating dinner is not a good idea.

The naturalist John Muir said that when we try to pick out anything by itself, we find it hitched to everything else in the universe.

The same is true in respect of your group’s success.  Just as it’s tied to patient care and patient satisfaction, it’s also tied to the organizational structure of your group, the agreements among the owner-physicians and between the group and non-owner physicians, and between the group and referring physicians, hospital administrator and others.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> When I read the practice management presentation topics of many organized medical societies, I’m stunned by the degree of victimhood and of loss of choice assumed.

Topics such as how to deal with engulfment by the ACO, negotiating with the management company selected by the hospital, and selling out to the hospital.

Why do the leaders of these organizations assume that an unwanted system can be imposed on their members?

Not every profession or specialty has a future.  Job openings for ice deliverymen plummeted with the invention of Freon and the popularity of home refrigerators.  It would have done little good for ice deliverymen to protest.

Is this what these medical group leaders are saying?  That there is no future for their members?

Or, is there a future, but the leaders aren’t leaders, they are collaborators?  Healthcare collaborators, that is.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> A few days ago I heard another of what is becoming a familiar story.

A hospital had dumped its longstanding hospital-based contractor (this time an anesthesia group) in favor of a “national practice.”  The national practice presented well – lots of guys in nice suits and far better graphics on their presentation materials than the old group.  And the old group “cost” too much.

Of so the hospital thought.

But the suits were empty.  The national group wasn’t a group at all.  It was a staffing, or rather, a billing, service.  And it couldn’t or wouldn’t recruit to full strength.  The hospital’s business faltered, resulting in the loss of millions.

Flash forward to a few days ago.  Less than a year after it arrived, the national group has been given notice of termination.  The hospital’s CFO, who championed the cost savings, has been fired.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> What an odd color Mercedes; pink, like cotton candy.

But what color is that pink?  The pink in your mind’s eye is different from that in mine, and from that of each other reader.

That’s because colors are perceptions made by each of us.

***

The three students filed into the room and took seats facing the large screen.  A block of  color was projected onto it.

“What color is the block?” asked a voice from the back of the room.

“Blue – Blue – Blue,” they replied.

“And this?”

“White – White – White.”

“And this block?”

“Green – Green – Wait, that block isn’t green, it’s pink!”

No, not a difference in perception, but a college psych study of compliance.  Will the test subject, the third student, parrot the obviously erroneous answer of the two confederates? Will he say that pink is green?

***

So what’s the right way of looking at ACOs, physician alignment, hospital-physician collaboration and other initiatives to bind physicians to hospitals?

Is it that I, like you, see the true color – control not alignment, top down authority not participation, lockstep factory medicine as opposed to individualized patient care, cookbook versus innovation?

Or is it simply a matter of seeing the same color in slightly different ways?

The test, I suppose, is to construct a collaborative deal in the manner of what’s commonly referred to as a Dutch auction:  One party names the price and the other chooses to be the buyer or the seller.  Or your brother splits the brownie and you choose the bigger “half.”

So, if collaboration really is the real thing, let the hospital design the deal, but the physicians control it.

The hospital’s CEO is turning pink!  What color, exactly?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> The tides come in and out, ties get wider then narrower then wider again, and society cycles round and round from “me” to “we.”

Today’s society is heavily affected by “we” think, from notions of shared sacrifice, to paying your fair share, to “giving back.”

Not every individual or entity in a society buys into the current stage of the cycle and that’s why trends eventually moderate and return toward the antipode.  However, there are some who, while holding a view closer to the other extreme, understand that they can benefit from co-opting the current zeitgeist.

Thus the move by hospitals to take advantage of “we” think.

As the current wave of collectivism shapes trends in healthcare, hospitals seek to ride that wave to further their own “me” interests:  Witness the completely hospital-centric notions of Accountable Care Organizations, healthcare collaboration, and integrated delivery systems.

Physicians are told that the future of healthcare is not in rugged individualism but, rather, in the “it takes a village” world.

But they are being told that by the hospital that wants to be the mayor of the village.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> It’s said that Henry Ford adopted the modern production line, with each worker focusing on a part instead of assembling a whole, from his observations of the way that Chicago slaughterhouses “dressed” pigs.

On October 1, 1908, the first Model T rolled off the production line.  Available, famously, in any color you wanted as long as that color was black.

Ford focused on keeping things simple, building one model that (had to) suit all, using interchangeable parts that relatively unskilled workers could assemble.

How different is this from the model of healthcare envisioned by many today?  ”Best practices” replacing innovation.  One model replacing high touch care.  Delivery via relatively unskilled workers (paraprofessionals).

In the end, the public wanted more – and the Model T rode off into history.  History is sure to repeat itself.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> The marketplace for hospital based services is becoming increasingly commoditized.

Along with it, we’re seeing the growth of large commodity providers with a commodity type business plan:  Provide the level of service that is minimally required.  Provide that service through low cost providers in order to upstream the profits.  Make money on volume.

The selling point to facilities is low to no stipend support.  After all, from the hospital standpoint, isn’t low or no stipend support a cost saving deal?

Maybe.  Maybe not.  You often get what you pay for.

You can buy a cheap pair of dress shoes that will crack and wear out in a year or you can buy shoes with an initial high price tag with much more supple leather and better craftsmanship that will last, with upkeep, more than a decade.  Which pair was actually less expensive?

In similar fashion, is it less expensive to reduce a stipend by $300,000 but to lose $1,000,000 through the destruction of O.R. efficiency or the skyrocketing increase in hospital negligence litigation?

Perhaps this issue won’t play out in the court of public opinion but in the court of law?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> The dominant business and financial paradigm for many physicians, especially hospital-based specialists, is that they are a commodity, a valuable one, perhaps, but a commodity nonetheless.  If you are ever to break out of the current paradigm, it will not be by benchmarking to the best practices of other groups headed downward in the same maelstrom.

Continue reading »]]> Did you ever see the infomercial for Blu-Blocker sunglasses or a copycat product?   Seeming passersby are treated to the view through the lenses and, voila, what was gloomy or glary or just plain old ugly is now bright, but not too bright, clear and lovely.

Are you wearing a metaphorical pair of those beauties right now when you look at your group?

“Why we’re the best group in the Upper Plateau of the Lower Flatlands!”  ”All of our providers are Board Certified!”

As you seeing your group as it really is or as you wish it were?

If it’s the former, then the chances are you have plenty of work to do.  Let’s get going.

If it’s the latter, then I suggest that you either buy some of those same lenses for your patients, your referral sources and the hospital CEO, because they’re going to need them to modify their view – the only viewpoints that matter — or that you default to the first option and start seeing straight.

Adding a second or third pair for free (just add additional shipping and handling) is a TV concept.  Do not attempt – closed course, professional driver.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Does the hospital want a relationship with your group or does it just want a transaction?

One of the key elements in the changing healthcare market is the fact that there is a growing desire on the part of many facilities to devalue the relationship aspects of their dealings with physician groups.

Instead, they view those dealings on a transactional basis.  Think about the difference between “Let’s align our interests!” and “What have you done for me lately?”

It’s funny timing, though, because hospitals are spending so damn much money and so damn much energy trying to convince physicians, politicians and the public that healthcare will be advanced through physician “alignment.”

They send their administrators to flavor-of-the-day seminars on alignment strategies and they  issue press releases on how well healthcare collaboration is working.  Yet at the same time, these same facilities are working hard to destroy decades long relationships with providers, both hospital based and office based, turning to price based competitors who are sometimes willing to lose money to garner market share, setting up their investors’ exit strategy.

Is this the great schizophrenia or the great hypocrisy?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Most hospital based physician groups aren’t committed to success at all, they’re just committed to wanting to be left alone, to staying the same.

But that’s impossible.

There are two classes of major practice disruptors lurking:

1. Large staffing/management services masquerading as national groups.
2. The disgruntled members of your own group who will destroy you.

The staffing/management services devote large budgets to advertising and marketing, and hire telemarketers to cold call your hospital. Their campaigns shout quality, quality, quality, but that they shout is often very different from what they deliver — and that’s their weakness.

Disgruntled members within your group are potentially an even bigger problem, a cancer that will eat you from within — and that’s your weakness.

Combined, the siren call of the staffing services sales force and the cancerous calamity caused by your partners and subcontractors who should have, but haven’t been, amputated, are a fatal mix.

Immunize your practice now.  Accept the fact that change is happening — that it’s happening to you unless you make it happen for you.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> The market for anesthesia services is changing quickly.  The trends of hospital-centric healthcare and commoditized staffing services masquerading as true groups are combining to form a maelstrom that will take many local groups, as well as a significant number of facilities and the staffing services themselves, to rock bottom.

What does this mean for your group?

In large part, it signals an even more increasing need to function as a true businesses, a business that recognizes that not all business is business worth having.

The difference between begging for business and being begged has more to do with strategy properly implemented than with anything else.

Mark F. Weiss

www.advisorylawgroup.com

© 2011 Mark F. Weiss

Continue reading »]]> THE ALG TELESEMINAR SERIES
*COMPLIMENTARY*

The Five Critical Steps To Protect Your Practice And Your Profits

Hospitals and so-called national groups are ready to poach your practice and your profits.  Unless you develop and implement a strategy to protect what you have created, let alone to expand from that base, your future will likely be as an employee of a commodity level practice.

Learn the five critical steps you must take now to control your own future, to protect your practice and to preserve your profits.

When:  September 27, 2011
Time:    4:00 P.M. Pacific Time
Length: 45 minutes
Investment:  $279 Complimentary to blog readers

Click here to register today!

Continue reading »]]> When I have a question about my health, about the last thing I think of is calling the hospital; I call my doctor.

But in the world of the future being designed in hospital board rooms and faculty lounges, healthcare relationships are seen as hospital-centric.  On the payment side, this agenda manifests as bundled payments and the ACO initiative.  On the delivery side the agenda includes employment of physicians by hospitals and their related foundations.  Of course, a key precursor to this situation was the targeted breakdown of the physician-patient relationship by managed care.

People are pushing back hard against Obamacare.  Physicians can tie into this anger by making their patients aware of the same loss of choice inherent in a system in which the hospital is the hub for their care.

Mark F. Weiss

www.advisorylawgroup.com

© 2011 Mark F. Weiss

Continue reading »]]> Until recently, hospitals granting exclusivity to a group demanded exclusivity, or a close approximation, from the group in return. Their position was based on the fact that they perceived the group to be of such high value that they did not want to share it with another facility.

So, for example, it was rather common for a hospital to argue during the negotiation of an exclusive contract for, say, radiology services, that the group should not provide services at any other facility. As hinted at above (and as many readers know from their own affairs), the exclusivity demanded by the hospital was often negotiated down by way of a geographic restriction or by conditioning the provision of outside services on the fact that it does materially interfere with the delivery of services to the contracting hospital.

Fast forward just a few years to the present, and many of those same hospitals are more than happy to contract with so-called national groups, many simply being staffing services masquerading as true groups, which have as a central element of their group “DNA” the fact that they are not in any means exclusive.

While national groups are not loyal, they are cheap.

So is cheap the new loyal?  Or is it that no one cares if a low value group is or isn’t loyal?

The opportunity, of course, for entrepreneurial physicians is to take advantage of the market segmentation that “cheap” is leading to:  One class of hospitals (consisting of the great majority of hospitals) that deliver cheap but competent services, and a second, smaller class delivering high quality service at, perhaps, a higher price.

On the one hand, this means seeking arrangements with facilities that value quality, not simply pay lip service to it. On the other hand, it signals that there may be an even greater demand for physician-owned specialty hospitals (yes, excluding Medicare patients) that provide better care.

Mark F. Weiss

www.advisorylawgroup.com

© 2011 Mark F. Weiss

Continue reading »]]> If you owned the only restaurant in town, chances are that even in a recession, business would be pretty good. People would be flocking to you and you wouldn’t have to do much, if anything, to drive business.

It appears as if many physician practices, from hospital-based groups with exclusive contracts to prominent office-based practices with significant market share, believe that their situation is locked in in the same manner.  Patients will come.

In fact, they often make the same mistake as the restaurant owner with a supposed exclusive on his market:  They believe that they can slacken in terms of services provided and marketing outreach and still thrive in their competitor free market.

No matter whether you hold an exclusive contract or simply a commanding position, your contract and your position can always be terminated or challenged. New competitors come to town – sometimes they are even recruited.

So, just like the smart owner of the only restaurant in town, you should continuously be marketing to your customers and improving upon the experience they receive, whether you view them as patients, referral sources, the hospital, managed-care plans, or even better yet, as all of the foregoing.

Just like the smart restaurant owner, even if you are the only game in town, market, and treat your customers, as if you have a competitor across the street.

Call it karma or call it consequences, failing to do so seems to act as a magnet to attract the competition that you believed would never come.

Mark F. Weiss

www.advisorylawgroup.com

© 2011 Mark F. Weiss

Continue reading »]]> Physicians may trust their colleagues in the sense of their professional relationships, but when it comes to business relationships within a medical group, especially those relating to money, trust is a rare commodity.

In fact, in connection with money matters, most group members tend to have an “eat what I kill” mentality, seeking to maximize their own compensation.

Groups can harness their physicians’ drive to self-maximize through a production-based compensation model, but those efforts generally fall short in the greater scope of advancing the group’s overall business success.

That’s because focusing solely on incentivizing personal productivity serves to disincentivize participation in efforts requiring teamwork and interferes with the group’s ability to direct its physicians to address issues beyond the ones that generate immediate income for that individual.

For example, paying $X per unit incentivizes the generation of units; it does nothing to incentivize (and therefore disincentivizes) cooperating with other members of the team on initiatives directed towards referring physicians.

A more effective approach is to design a compensation plan that contains both individual incentives and rewards for group efforts, such as leadership, overall group or practice section profits, or the group’s achievement of specific business targets. And, to engender trust, the rules governing how the compensation formula works must be clearly understood so that the resulting compensation can be proven.

Note that I do not mean that there cannot be subjective factors – in fact, there must be subjective factors. However, the way in which those subjective factors are applied must be contained within overall group beliefs (for example, measured consistent with an overriding principle that the group always responds to hospital needs) or within specific parameters (for example, measured by participation on group committees or in mentoring new group members).

If your group truly is a group (see my post The Four Circles™ for the answer to that question) then you must align your compensation plan to best assure your group’s success.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> There’s little question that most, if not all, medical groups should be led by practicing physicians.  The problem is that too many groups create policies, either formal or informal, that actually dissuade and hinder the ability of physician leaders to lead.

Specifically, I’m talking about the fact that groups tend to put far too much emphasis on the need of physician leaders to practice medicine as opposed to spend the time required to actually lead the group.

For example, let’s imagine a group of 12 physicians generating, say, $8 million a year in gross collections.  Let’s also assume that they generate that equally; in other words, they each generate $666,666.

If the group leader cut back his or her production by 20% in order to devote time to leadership, most groups would focus on the $133,333 “lost.”  However, there’s a very good chance that that work would be spread over the other members of the group.  Far more importantly, freeing up the ability of the leader to actually devote time to leading might make the difference in preserving the group’s relationship with the facility that if lost, would destroy the group and its $8 million a year of cash flow.

Group leaders should be given the ability to lead and they should be compensated for it.  That effort is in many cases far more valuable to the group’s overall success than any direct patient care income that would otherwise result.

Don’t be penny wise and thousands-of-dollars stupid.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> If you think that exclusive contracts are just for the hospital-based specialties, anesthesiology, emergency medicine, pathology, and radiology, you’re wrong. There is a growing trend of hospitals entering into exclusive contracts for a range of what have traditionally been office-based specialties. 

Related to hospitals’ drive to create accountable care organizations and to, in general, create a hospital-centric system of healthcare delivery, hospitals are becoming more brazen about designating office practice physicians as the exclusive group with privileges within their specialty at the facility.

For example, hospitals are entering into exclusive contracts for specialties as diverse as cardiac surgery and gastroenterology.

On the one hand, this signals danger for groups of physicians who are not “blessed” with the hospital’s seal of approval.  This underscores the need to utilize scenario tools such as The Scenario Survey Process^TM as an active part of strategy development to prepare for your future.

On the other hand, it creates an opportunity for a new stream of income – hospital stipend support — for those groups that are awarded exclusive contracts.  Those groups are urged to heed the experience developed over the three plus decades of traditional hospital-based exclusive contracting in designing and implementing their relationships with facilities.

After all, if hospitals get their way, all physicians will be hospital-based.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Socialism is alive and well, and I’m not simply talking about the socialistic charade of Hugo Chavez.

Instead, I’m talking about the employee or subcontracted members of your group who, even though they are being paid every penny due to them pursuant to their employment agreement or subcontract, have the misguided mindset that “there is money missing” or that the partners are “stealing money,” as if any purportedly “missing” or “stolen” money would, in any event, be theirs.

Perhaps this is simply a symptom of a larger societal problem: the cancer of social justice which is simply a pig-in-a-skirt term for an entitlement attitude magnified to the level of socially acceptable theft.

But whatever it is, it’s a cancer within your group.  If allowed to fester, it will, at best, cause dissension within the ranks.  At worst, it will result in employees and subcontractors running off to hospital administration to complain about their “unfair” treatment, the likely result of which will be their use by the administrator as weapons to destabilize your group’s leadership structure.

Yes, to use another socialist analogy, this time from the other side, your employees and subcontractors will be used as useful idiots to destroy your leadership and, in the long run, to destroy the idiots themselves.

If your patient had cancer it would be removed.  If your group has cancer . . . .

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> A few years ago, I wrote two articles on physician group governance, both available on the ALG website, one for AuntMinnie.com, a radiology publication, http://www.advisorylawgroup.com/radiologygroupungov.html , and the other for Anesthesiology News, http://www.advisorylawgroup.com/anesgroupungov.html.

There’s an important reason why physician groups must do away with overly democratic or consensus style systems of governance:  Those approaches make it impossible for the group to adopt a strategic, as opposed to a tactical, outlook.

Take a consensus style group that is unable to come to terms in respect of the expanded office hours demanded by a large number of referring physicians in the community.  From a purely tactical standpoint, the group ventures into the question of the cost of the extra hours of operation and, although unspoken, of the convenience factor as run through each doctor’s personal filter.

But the strategic analysis is very different:  If we value their referrals, how do continue to obtain the ongoing business of the physicians in our community who are already referring to us?  This, of course, requires an understanding of the concept of lifetime value.

As to the question of who should be making that decision, true democracy doesn’t work in business any more than it works in running a city, state or nation.  As I advise clients, I’m a strong proponent of the “strong leader” form of governance.  Whether that leader is grandfathered in or elected every year or two is an issue that turns on the culture of the specific group.  If elections are the culture, that’s where democracy comes into play:  representative democracy.

Leaders must be empowered to lead.  Not all of their decisions will be good ones, so they must be free to fail as well as to succeed.  Requiring a group vote or establishing a board consisting of all of the shareholders guts leadership and replaces it with its poor relation, consensus, which by nature suffers from the defects of peer pressure and compromise.

Lead, follow or get out of the way.  Or, as the English author G.K. Chesterton poetically put it, “I’ve searched all the parks in all the cities and found no statues of committees.”

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Do hospital CEOs really want your hospital based group to succeed?  As to clinical performance, the answer is “yes.”  But as to everything else the answer is a resounding . . . “maybe.”

For the full story, watch the short Q & A No. 4 video on the ALG website.

Mark F. Weiss

www.advisorylawgroup.com

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Continue reading »]]> For the most part, physicians are stuck in a Marxian world of reimbursement:  Pay is based upon the value of labor, whether measured in ASA units or wRVUs.

It’s a mistake to assign value on the basis of input (labor) when the real measure is in the value of the output, whether seen as cure, palliative relief, assurance or even . . . life.

At the national level, the talk is about controlling the “cost” of healthcare.  Instead of lauding the effort, physicians should be advocating for the revisiting of the basic assumptions behind physician compensation — that means advocating for pay based on the value of the output.  Certainly I understand that there’s only so much in anyone’s budget, individual, government program or private carrier, but perhaps the budget should no longer be balanced on the heads of physicians.

Obviously, this is not a post about controlling the “cost” of healthcare.  It is a post about getting you what you are truly worth.

Mark F. Weiss

www.advisorylawgroup.com

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Continue reading »]]> More and more hospitals are disrupting their longstanding hospital-based group relationships as they seek to cut stipends and get more for nothing.  The favored tool?  A “weaponized” form of the request for proposal, called a “Fulcrum RFP™, designed to get a group to grovel for the continuation of its contract.

Of course, the concept of an RFP is not new; it’s been used for decades across many industries and by governmental agencies.  But as opposed to its traditional use, identifying vendors for discrete supply orders or for a one time project, the Fulcrum RFP is increasingly being used as club to beat down the expectations of the present provider group.

You can classify RFPs into three distinct categories:

True RFPs™ — These are actual searches for the best quality provider with a favorable quality/cost ratio.  This type of RFP is the closest in relationship to the traditional form used in industry and government.  It’s commonly seen in situations in which the current, or sometimes very recently former, group has “blown up” and can no longer provide coverage, and in situations in which the current group has completely lost the facility’s trust.

Fictitious RFPs™ – These RFPs belie the fact that hospital administration is not interested in the merits of any response; they have already decided to whom they will award the contract.  Yet, for one political reason or another, they’ve decided to issue a phony RFP to project a patina of “fairness” to the medical staff, to the hospital’s own Board, to some third party . . . or perhaps to you.

Fulcrum RFPs™ – This is the increasingly common type of weaponized RFP.  As the name implies, Fulcrum RFPs are designed to create leverage.  The facility intends on renewing with the present group but uses the RFP as a tool to dictate terms by fiat and to pressure the group into negotiating against its own best interests out of fear of replacement.  Nonetheless, the facility is open to competing proposals.

It’s essential to understand in any particular situation what type of RFP you are dealing with in order to calculate your group’s response, or, in some cases, to determine whether or not you will respond at all.

Of course, the best defense is the development of a strong experience monopoly combined with expansion of your business to serve patients at multiple facilities.

As financial pressures on hospitals increase and as commoditization of hospital-based physician services continues, the trend toward RFPs will intensify.  Develop and implement your strategy now, preferably years before you find yourself on the receiving end of an RFP designed to replace you, to force disadvantageous terms, or, even worse, to have you offer to cut your own economic throat in the mistaken belief that a slow bleed is better than a quick chop.

Mark F. Weiss

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Continue reading »]]> You’d think that after spending millions of dollars setting up a foundation model entity to employ physicians, or even going out, in those states without prohibitions on the practice of medicine, and employing physicians directly, that hospitals would want you to succeed.

Well, they do, sort of — but only to a point.

Historically, physician practice was entrepreneurial.  For one reason or another, chiefly related to the complexity of running a practice in today’s economy, many physicians have chosen the hospital employment route.

But despite any assurance to the contrary, once within the hospital’s bureaucratic model the rules change:  You are managed because that is what bureaucrats do.

You’ll be free to develop your expertise but not to the point that you will become a star.  If you were allowed to become a star, you would obtain leverage and might leave.

There’s a tension to have scores of mediocre physicians on the team - entrepreneurial physicians and those striving for personal excellence are too much of a threat.

You’ll be paid fairly well, but not above what are actually mediocre levels such as the 75th percentile on employer-favorable surveys. At that level you will be paid more than most, if not all, of the bureaucrats in hospital administration and paying you more will be viewed as “unfair.”

Of course, over time, with more physicians being among the employed, the actual dollar amount of 75th percentile compensation will spiral downward. But not as low as that of physician assistants, specialty trained nurses armed with newly minted “doctor” degrees, and other physician extenders who will be used by your employer to muscle you out of a large part of your clinical role.

After all, to the bureaucrats in charge, even those bureaucrats in white coats, it will be done in the name of efficiency.

In a way, it’s like the classic Twilight Zone episode, To Serve Man:  You might feel that you are participating in something greater, but the reality is that you’re on the menu.

Mark F. Weiss

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Continue reading »]]> Proponents of the ACO model argue that this time it’s different, that the model is not about controlling physicians, it’s about clinical issues and getting physicians integrated with other providers, both in respect of macro issues (e.g., establishing protocols, determining best practices and the design of studies) and micro issues (e.g., the coordination of a particular patient’s care).

Proponents of the ACO model argue that this time it’s different, that the model is not about controlling physicians, it’s about clinical issues and getting physicians integrated with other providers, both in respect of macro issues (e.g., establishing protocols, determining best practices and the design of studies) and micro issues (e.g., the coordination of a particular patient’s care).

But that argument entails a large dose of revisionist history:  The proponents of prior movements to manage physician behavior, for example, managed care and integration models such as the PHO, did not sell their wares, at least publicly, as such – they, too, touted their models as being for the betterment of patient care.

“Managed care” was said to be about managing how care is delivered across multiple providers.  HMOs were said to deliver better and more efficient care because they were premised on maintaining health, not waiting to treat disease.  And PHOs were all about aligning the incentives of physicians and hospitals such that better care was delivered more efficiently.

The truth is that this time it is different, but in a very different way than ACO proponents would have you believe.  Over the decades since the beginning of the managed care movement, the microchip revolution has made it even more possible for disparate participants to coordinate care in the absence of any actual command and control authority.  The changes made possible through advances in technology are democratizing and an assault on those who want to control from the top down.

Viewed in the light of technology, and the fact that its progress will continue at an even faster pace, the ACO model as viewed by its hospital-centric proponents is a reactionary step, a gasping grasp by those wishing to impose control over physicians, control which is not needed in terms of the actual coordination of care.

Mark F. Weiss

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Continue reading »]]> Healthcare deal compliance, in terms of antikickback, Stark, and tax exempt entities, often turns of the propriety of the consideration paid. And that turns on the concept of fair market value, which is often neither fair nor indicative of value.

That’s because fair market value is defined for those purposes in a fashion that ignores economic reality, such as the Stark definition of “the value in arm’s-length transactions, consistent with general market value and, with respect to rentals or leases, the value of rental property for general commercial purposes (not taking into account its intended use) and, in the case of a lease of space, not adjusted to reflect the additional value the prospective lessee or lessor would attribute to the proximity or convenience to the lessor where the lessor is a potential source of patient referrals to the lessee.”

In other words, the value attributable by the actual parties to the relationship, strategic value, is not permitted to be considered.

Understandable, perhaps, as the notion is to do away with value based on the worth of referrals.

But completely ridiculous if you want to be paid for the actual value you are providing while still excluding any value relating to referrals.

The solution is not to run the risk of noncompliance by ignoring required definitions of fair market value.  Rather, it is structuring your business operations and the scope of deals to capture and extract strategic value outside of the regulated realm.  Not all practices can do this.  But if yours can, and it is not, then you’re leaving significant dollars on the table.

Mark F. Weiss

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Continue reading »]]> According to a report in the January issue of the Journal of the American College of Radiology, a study reveals that the total amount of Medicare payments to non-radiologist physicians for non-invasive diagnostic imaging is greater than that paid to radiologists.  The reason:  self-referral within non-radiology practices.

No real news as to the role of self-referral.

The question, though, for radiologists, even at the hospital level, is how the self-interest of cardiologists, primary care physicians and orthopedists, the non-radiology specialists receiving the most imaging money from Medicare, can be used by radiologists as a part of a strategy to capture more of the total market for imaging studies.

In other words, it’s one thing to be lobbying for changes in both state and federal self-referral laws, but quite another to use self-interest and “conflicts of interest” as tools at the medical staff and hospital administration level.  Said by the lead author of the study, the issue is a political hot potato.  Yes, it is, which is why it’s easier to toss into the laps of those on the medical staff than it is to toss all the way to the state capital or to Washington.

Mark F. Weiss

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Continue reading »]]> I’ve sometimes wondered about the amount of importance attached to the arbitrary selection of the date we call January 1, New Years Day, as the date on which to make resolutions about our future behavior. Perhaps I’ve waxed way too philosophical, but why January 1 – after all, prior versions of our calendar began the year on March 1 and didn’t even have a January – and why not make resolutions any day . . . if you intend on keeping them?

But the notion of a fresh start is important; a clean break from the past. Last year at this time I suggested that instead of making resolutions to do something, you consider resolving to stop engaging in some destructive physician business behavior. You can watch that videocast, New Years UnResolutions, Wisdom. Applied. No. 12, on the ALG website.

This year, I’d like to continue that trend, with some UnResolutions for 2011:

Number 1. Don’t buy into thinking that the hospital is “forming” an ACO. Instead, adopt the mindset that you and your fellow physicians will work with the hospital on ACO formation and governance — and then hijack the process to assure “cooperation” with terms dictated from the physician standpoint.

Number 2. Don’t believe that you play a part in the “healthcare system.”  Remember that those who say that “it takes a village” see themselves as the mayor.

Number 3. Don’t think of your practice as being in one particular business, the provision of your specialty’s services.  Think in more entrepreneurial terms and consider unlocking the potential value of its intellectual property, either as a separate service line or as a separate venture.

And last but not least, Number 4. Don’t consider your professional services as your practice’s product.  Your practice is the product – make that product unique.

Happy New Year.

Mark F. Weiss

www.advisorylawgroup.com

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Continue reading »]]> I’ve written before about the importance of customer service (see, for example, my blog posts of  September 26, 2009, and June 3, 2009, or my article Securing Customer Satisfaction).

Many medical groups have trouble focusing on improving customer service, and in getting their providers to implement tactics to support the group’s customer service strategy, because they view customer service as something that solely benefits the customer.

Although it’s true, by definition, that customer service is customer-centric, it’s also of high value to the servicer, on many levels.

Providing high-value customer service to patients, referring physicians and facilities, is a significant part of creating an experience monopoly that serves to protect and preserve your competitive position and contractual relationships.

A focus on customer service becomes a lever to improve the group’s overall performance, thus delivering a multiplier effect.

It may be difficult to start up, but once a system is in place it creates its own inertia.

Importantly, it creates an atmosphere that is far less stressful in the long run, and far more fun.

Continue reading »]]> In the relationship between a physician group and a hospital, problems happen.  Planned or unplanned.

For example:  Someone finds a partially used vial of drugs that was not properly disposed of.  The CEO complains about your level of service.

Most groups view these events tactically:  They happened.  Now what?  Accept responsibility?  Ignore and hope it goes away?  Blame it on someone else?

But when viewed strategically, most problems in this context are indeed opportunities.   I’m not talking simply frame of mind, as in “every problem is an opportunity in disguise” or even pseudo scientific NLP.  I’m talking actual opportunity – a situation that can be flipped and made, though very fast filtering through your group’s overall strategy followed by very fast deployment of a conforming tactic back to the source or a relevant third party.

I call this strategy The Situation Transformer™ – it’s making lemons into lemonade.

When a problem of this sort next occurs for your practice, think what advantage can be gained.  But to do so effectively requires that the advantage be in the viewed through the lens of overall group strategy — which means you must have one — and that you have the ability to respond more quickly than the hospital can take effective action in respect of the problem.

Mark F. Weiss

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Continue reading »]]> The bizarre story of the JetBlue flight attendant who, after an altercation with a passenger, made a profanity-laden speech over the plane’s intercom, grabbed beer from the galley, opened the plane’s door and slid down the emergency evacuation chute, just got even more strange:  He’s become a web sensation, lauded by other self-absorbed losers for his refusal to take it any more.

Many medical groups have their own, physician versions of the flight attendant, prone at any moment to go off on a patient, nurse or colleague.   I guaranty you that no one of sane mind will think it’s funny.

Your relationship with the hospital, your exclusive contract, your group’s referrals and your group’s standing in the larger community will be put at risk.

What are you doing now to prevent this potential situation from blowing up your practice?  What is your back up plan in the event that your preventive action fails?

Mark F. Weiss

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Continue reading »]]> ObamaCare has made it harder than it was before for physicians to own hospitals participating in federal healthcare programs.

One option of course, open for as long as there is still private health insurance coverage, is for physicians interested in hospital ownership to own facilities that exclude federally funded patients.

The other, and perhaps superior option is to consider that controlling a hospital may be better than owing it.  Hospitals, even money losing ones, are expensive to own and operate.  If physicians are blocked from investing in hospitals accepting, for example, Medicare patients, why not focus on non-profits and on district hospitals by gaining control of their boards of directors. 

Sure, you wouldn’t be able to declare a dividend, but the fact is that as hospitals begin to play a larger and larger role on both sides of the healthcare market (facility and provider), for example via Accountable Care Organizations, why not seek to control the controller?

An uphill fight, for sure.  But one that just might be worth it.

Mark F. Weiss

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Continue reading »]]> Disraeli commented that there are lies, damned lies and statistics.  It’s time to add acronyms to the list.

A new acronym to save healthcare has arrived, the ACO, an “accountable care organization.”

But accountability to whom?  And for what care, exactly?  Lastly, and most importantly, who runs the organization?

An ACO, is about power and control over physician services rendered and, importantly, power and control over physicians’ incomes.  ACOs are the intended funnel of payor funds – they serve as a mechanism to distribute those funds and, as such, invoke the Golden Rule:  He who has the gold makes the rules.

Hospitals and their associations are scrambling to build ACO networks.  Don’t for a minute think they have your interest at heart.

The opportunity exists to seek physician control of ACOs:  There is no rule that requires that control run one way, from the hospital to the physicians.  Difficult, yes.  But what’s the real alternative?

Mark F. Weiss

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Continue reading »]]> So, Obamacare passed.

While there’s a time and a place to discuss political reactions, this is neither. 

Instead, my take is that we might as well see it, in true lemonade from lemons fashion, as a clarion call for hospital based physician groups to refocus (assuming you’ve ever focused at all) your stipend strategy.

In all likelihood, Obamacare will bring more patients to the hospital, patients with poorer, not richer, reimbursement attached. 

Unless you’re prepared to work more, for less, you’d better start envisioning a better future than Washington has planned (and I do mean planned) for you.  And you’d better develop a strategy to reach it. 

Hospitals may be crying broke, but it’s impossible to run their facilities without you.   Either you engage in this strategy or engage in the race to the bottom. 

See, there is “choice” in Obamacare after all.

Mark F. Weiss

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Continue reading »]]> You own the hot dog concession at the local major league ballpark.  Because 50,000 plus potential customers come to the facility several days a week during baseball season, sales, and profits, are good, so good that you pay a hefty fee for the right to operate the hot dog stands.

Later, stadium management wants to increase their ticket sales, so they get you to agree to honor coupons distributed in the community — in varying amounts, they give the holder a discount of up to 70% off.   Sales, in terms of volume, is up, way up.  But, for each of the many hot dogs eaten by the coupon holders, a large bite is taken out of your profits.  So much so that after a few years of operating at a near or actual loss, there’s no way that you can afford to continue operating the stands. 

The stadium, realizing that baseball without hot dogs isn’t baseball, decides to incentivize you to keep operating the stands.  They pay you a fee to assure that you will make enough profit, as measured by an “expert” as of that day, to keep the stands running.  But you’ve got to keep honoring the coupons — and the stadium managers keep printing more and more coupons.

Would you keep running your hot dog stand if business slips back into the red (after all, the public needs hot dogs) or would you either negotiate additional funding from the stadium or find a new venue for your products and your services?

Of course, the stadium is a hospital and your concession stand doesn’t sell hot dogs, it renders hospital-based medical group services.  But, the analysis is much the same.  Instead of food, you sell anesthesiology, radiology, pathology or emergency medicine services.   You hold an exclusive contract, not a concession-stand agreement.   But what is it that hot dog vendors know about strategy and tactics that you don’t?

If you’re selling medical services but collecting only peanuts (or even hot dogs) let me know.  You need a better agent.

Mark F. Weiss

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Continue reading »]]> It was a little after 4:00 a.m. as I left my driveway.  Pitch black and raining.

But from the moment I merged onto U.S. 101 heading south into Los Angeles to give a grand rounds presentation, there were other cars on the road.  By 5:30 a.m., as I approached the major arteries of the L.A. freeway system, the road was crowded.

I began to play the imagination game:  Where was everyone going?

Many, I suppose, were headed to factory jobs that started at 6:00 or even 7:00.  The same drive in, day after day.  The same start, middle and end of work.  The same drive home.

That morning, as I gave my lecture, I commented on the experience to the audience, medical residents and attending staff. I questioned them as as a group, as I question you now:

It could be that you provide emergency medicine, or anesthesiology, or pathology, or radiology services, or that you are an office practice physician in a group.  But how many of you are going to a factory, too, just a factory of a different kind?  How may of you have the same factory worker mentality?  The mentality of “I’ll work for what they give me” — sure the “reward” is quantitatively different but the situation is qualitatively the same.  The mentality of the same old same old, of plus ça change, plus c’est la même chose.

To break free requires a change in mentality.  As they say, a mind is a terrible thing to waste.

Mark F. Weiss

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Continue reading »]]> Whether you are an anesthesiologist, radiologist, pathologist or emergency medicine physician, picture a meeting of your national specialty association.  Chances are great that you’d hear voluminous hallway chatter bemoaning more work and lower collections, what I call an increasing Workload-Reimbursement Gap™.

Chances are also great that you would hear next to nothing in the symposium presentations of any practical value in terms of bettering your economic circumstances.

There are two tragedies at play here,  both of which scream the need for, at least on a metaphorical level if not actually, some type of group therapy:   

First,  the situation is symptomatic of incredibly low self-esteem:  ”They are doing it to us and we have no power to change.”

Second, the complaining is a self reinforcing loop:  everyone is complaining to everyone else who then complains to everyone else.  Everyone being equally miserable means that it must be all right that we ourselves are miserable. 

It would be far healthier and more profitable to question the basis of the system itself:  Why are physicians working much harder for less money?  Why is it proper  that there are so many regulatory burdens interfering with physicians’ abilities to own and refer to  facilities?  Why is it improper to benefit from the provision of care (e.g., self referral) but not from the denial of care (e.g., leading to insurance company profits)?

Why, simply because you are in a so-called personal service business do you believe that service — actually, the expropriation of your services — takes precedence over your business?  Why should the fact that you practice at a not-for-profit hospital mean that you are required to provide charity care?   I’m not saying that you can’t choose to donate your services, but we’re talking about being required to make the “donation.” 

Take back control of your destiny.  It starts with adopting a different mindset.

Mark F. Weiss 

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Continue reading »]]> Fear of rising healthcare costs is being used to attack exclusive anesthesia agreements.  Similar arguments can be used to attack other service department agreements:  exclusive radiology agreements, exclusive pathology agreements and exclusive emergency medicine agreements.

The argument goes as follows:  Hospital exclusive contracts are anticompetitive and therefore allow one group to control pricing.  Hospital coverage stipends paid to groups under exclusive anesthesia agreements, exclusive radiology agreements, exclusive pathology agreements and exclusive emergency medicine agreements contribute to the high cost of healthcare.

Of course, this ignores the fact that exclusive contracts with provider groups are necessary to obtain 24/7/365 coverage, that contracts are required to provide care for all patients on a face-sheet neutral basis, and that a market for services exists such that unless a coverage stipend (which is within FMV bounds) is received, the group will not be able to recruit and retain qualified providers.  It also ignores that payment for physician services is almost always dictated by the payor, not the group, and that hospital stipend payments have little to no impact on the scope of reimbursement received by the facility for the technical components of anesthesia, radiology, pathology and emergency medicine services.

But playing to fears makes for good sound bites.  And, hospital administrators might attempt to take advantage of them to gain leverage in their negotiations with you.  Good groups will be prepared to address them.   Strategic groups will be proactively engaged in countering these mistaken assumptions well before the face to face stage of negotiations begin — this takes time and effort.  (See Hospital Based Groups Must Get Aggressive, It’s All Related, Group Message Requires Consistent Language, and many of the articles here.)

Mark F. Weiss 

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Continue reading »]]> If a hospital’s demands on your group have markedly changed but the compensation for your services has not kept pace with the market, it’s not only unfair, it’s immoral, that you continue to eat the burden.

Proper planning at the time of exclusive contracting includes developing a strategy to terminate and addresses the issue of what might trigger stipend renegotiation.

Even with that planning, making the most effective renegotiation move and taking the steps required to set it in motion require considerable lead time.

Even if your group didn’t engage in advance planning to build specific contractual language into its hospital exclusive, all is not lost; it might still be possible to achieve a similar result with a well thought out and implemented strategy.  

There’s nothing glorious in financial failure, especially when the hospital is reaping a benefit from causing your loss.

Mark F. Weiss 

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Continue reading »]]> Taken individually, a few dogs with mildly aggressive personalities is one thing; let them form a pack and the level of aggressiveness rises astronomically.

We’re all familiar with pack behavior among animals, but are largely unaware of pack behavior among humans even though we encounter it regularly.

The social psychology concept of “group polarization” describes the fact that when people form into a group, they tend to make decisions that are more extreme than its individual members would make alone.  For example, there are studies in connection with how juries make punitive damage awards in which the group renders a decision which outstrips even the most fervent individual member’s pre-deliberation number.

Interestingly, this phenomenon presents an opportunity to be taken advantage of.  Suppose, for instance, that you’re negotiating for a stipend for your group’s provision of a new service.  How should your strategies and tactics differ if you were told that you’d be negotiating with a committee of three administrators as opposed to with one counterpart?

Mark F. Weiss 

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Continue reading »]]> “Hi, my name is Dr. X and I’m a workaholic.” 

Actually, it’s usually much worse:  Dr. X spends devotes his or her life to working in the production side of the practice (that is, on aspects related to patient care), which means that there’s no time left to devote to working on it. 

As a result, the Dr. X’s of the world aren’t aware of the problems with their practice.  Dr. X’s might brag, “Collections increased 5%” but they don’t have any understanding of the fact that collections might have increased 12% or even 18%.

Resolve to make 2010 different:  Set aside time each week to strategize your long term goals.   And then devote time each day to the proactive steps that must be taken to achieve them.

Mark F. Weiss 

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Continue reading »]]> Wildebeest, travelling in a herd of 1.5 million animals, migrate annually across the Serengeti.  Predators lurk.  Their targets are not the strong or even the multitudes of animals pulling together with the pack.  Rather, it’s the stragglers, the unfocused and the tired who become the easy pickings.

We’re animals, too, and this same relationship of predator and prey plays out daily between your hospital based group, on the one hand, and hospital administration and physicians with adverse interests, on the other.

Signal weakness or disorientation or lack of focus on business or political matters (even though you remain incredibly focused on patient care) and you become perceived as the weak link. 

Strategize for your future, deploy tactics in order to achieve your goals and forcefully attack your opponents and you are perceived as too strong to mess with.  

Certainly, there are limits to the acceptable bounds of aggression, but in the real world fewer groups have problems resulting  from misunderstanding those limits compared with the larger number of groups that lack any understand of the opposite limits — the bounds of weakness and the far more likely, and more devastating, result.

Mark F. Weiss 

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Continue reading »]]> Just because your hospital based group operates within the bureaucratic world of the hospital does not mean that it must be bureaucratic itself.

The trick is to operate an entrepreneurial entity partly within those bureaucratic bounds.   I say “partly within” because the most successful groups move outward from there.

It’s sometimes difficult for group leaders to see that it’s much safer outside the bureaucratic web. 

In working with clients in the course of The Strategic Group Process™, clients sometimes needs new goggles, so to speak, in order to perceive that that hospital’s bureaucratic web is not a safety net, it’s a spider’s web.  If you’re not the spider, that’s a dangerous place to be.

Mark F. Weiss 

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Continue reading »]]> Saying that you’ll consider the issues (or do the planning, or consider the options, or…) “when negotiation with the hospital begins” misses the point entirely.  The negotiation has already begun, you just don’t know it.

It’s exactly on point with the observation about being at a poker table:  “If you don’t know who the patsy is, you’re the patsy.” 

Mark F. Weiss 

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Continue reading »]]> “From a dog’s point of view his master is an elongated and abnormally cunning dog.”  – Mabel L. Robinson

Why is it that dogs seem to immediately know someone’s intentions but that it takes us so much longer to figure them out?  Perhaps we’re just as good as interpreting the situation but we’ve covered it up with all of the other functions that our higher level brain is so good at.

The key appears to be a dog’s ability to observe and discern patterns of movement — perhaps a result of their ingrained hunting instinct.  For example, when I dress in the morning, one of our dogs, Diesel, lounges quietly until he hears me take my shoes from the rack — at which point he springs to life as if with an imaginary cartoon bubble above his head, “We’re going for a walk!”  Sure, sometimes I’m just going downstairs to get coffee, but often enough Diesel is right.

Your colleagues in your group, your competitors and contracting partners, and the administrators at your hospitals are predictable, too, if you allow your powers of observation to rise above the weight of neuro evolution.   Sure, every time “Bob” repeats a pattern does not mean that he’s “going for a walk,” but the odds are usually in favor of the fact that he is.  And, unlike dogs, we can take steps to hedge our bet in the event that we are wrong.

If someone calls you a dog, thank them for the compliment.

Mark F. Weiss 

www.advisorylawgroup.com

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Continue reading »]]> When my kids were younger, we used to play a game when we left a store.  We’d critique the way that the store employees greeted and treated us, whether or not we made a purchase.

Think about the last time you visited a store.  Were you greeted — in a non-canned manner — when you walked in?  Were you made to feel welcome?  Were you assisted but not pushed?  And when you left, did someone thank you for visiting?

Think about the last time you went to the doctor — no, let’s flip this around:  If you’re an office practice physician, think about the last patient you saw in your office.  If you’re in a hospital-based specialty, think about the last patient with whom you interacted.   Did you greet them?  Did you say “thank you” to them at the end of the interaction? 

Common sense says that these pleasantries — the hellos, the pleases, the thank yous — should be part of every customer/client/patient interaction.   Nearly none of your competitors will ever put this into action.  That’s why Voltaire said that common sense is not so common.

 That’s also why it’s absolutely so easy to use these pleasantries to create relationships with your patients — relationships that will in the long term make your practice more profitable, and that will make life more pleasant for your patients and for you.

Mark F. Weiss 

www.advisorylawgroup.com

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Continue reading »]]> No, this isn’t a post about self-destructive behavior within medical groups, although that’s a great topic for another day.  It is, however, a post about introspection — with a twist.

Despite all the news about the economy and falling physician incomes, many medical groups have difficulty competing for talent.  Note that I’m not talking about simply competing for “bodies,” even bodies with medical degrees.  I’m talking about highly qualified candidates, both in terms of medical and interpersonal skills. 

Similarly, many medical groups are having difficulty competing in respect of attracting and retaining profitable patients as well as, for hospital-based groups, creating highly profitable relationships with facilities. 

These may seem like difficult problems, but there are solutions that can be implemented easily.

From my articles and other posts, you know that I firmly believe that a medical group must imagine its own future before it can embark on achieving a transformational result, and that the process starts with honestly assessing where you presently are. 

A great tool to use in connection with both imagining your most desirable future and in assessing your present position is to envision what it would be like to compete against yourself.  For example:  How would your imaginary competitor entice job candidates?  What would the competitor do to retain its employees?  How would it decimate your relationship with referral sources?

If you put the results of competing against yourself to work, you’ll soon realize that it’s preferable to real competition.  

Of course, it won’t make actual competitors go away, but as a first, easy step in the process, it will put your group on the track of lessening the effects of competition.  Implementing the rest of the process will help you get to the point that, ultimately, your would-be competitors won’t even understand how you are competing.

Mark F. Weiss 

www.advisorylawgroup.com

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Continue reading »]]> There are many reasons why contracts are usually contracted — made compact, that is — by having them contained within one fully integrated document.  The primary reason is that the “whole agreement” can be found in one place, leaving less ambiguity (one hopes!) about what the parties intended their deal to be.  That way, it’s easier to enforce that deal, or so the story goes. 

But just because that’s the general rule does not make that rule the best way to approach contracting in every instance. 

In some cases, it makes more sense to accept more risk in terms of how a judge might see the “deal” in return for binding the other party to a set of terms that would never be possible, from a negotiating standpoint, if the entire arrangement were reflected in one document.  In other cases, a multi-document agreement achieves what one document can never do:  It becomes both stronger and more flexible.

In those instances, no matter how much more likely it would be that a single document would be enforced, if would not, by definition, contain the complete deal that you seek.

Breaking things up is sometime the best way to make sure that they’re whole.

Mark F. Weiss 

www.advisorylawgroup.com

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Continue reading »]]> What does your ideal future look like?

Feel silly thinking about this?  It’s normal.

Is your ideal future achievable?  Maybe … but probably not.  But that’s not the point of the exercise.  The point is to set a goal, a point in space and in time from which you can look back to today – to metaphorically shout, “Look, I’m here, come and join me!” to yourself and, once you learn to communicate the vision, to your colleagues. 

Let me show you how easy this really is.  Think back to when you started your career; five, ten, thirty, fifty years ago – it doesn’t matter.  If you’re just starting out, think back to when you were just starting college.  Think about the milestones along the way, both the ups and the downs, as you’ve made what is in all probability a dramatic increase, no matter how you measure it. 

Now, imagine yourself at the age of your starting point.  Consider the incredible increment of change from that point to today – you would have considered it remarkable . . . yet today it’s totally normal.  If you’re like most people, you’ve already made tremendous multiples of progress over this past. 

Once you realize that you’ve already done it, it’s not difficult imagining a new tenfold or twentyfold or even hundredfold transformational future. 

So what’s that future look like?

Mark F. Weiss 

www.advisorylawgroup.com

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Continue reading »]]> Improving your group’s performance might be the worst thing you can do.

There’s nothing wrong with the notion of getting a little bit better each day, month or year.  That is, if you discount the fact that improving the current structure of your group might keep you from getting where you really could be.

We’re all familiar with the situation in which we spend considerable money repairing an old car, not a collectible, when all we end up with is an old car that leaks less oil.  And, I’ll all too familiar with a potential client who says his group does not need to improve because they increased their income three percent last year to an average per partner of $400,000.  Perhaps income could be up 20 percent and perhaps average per partner income could be at $750,000.

There are several major defects in a plan based on incremental growth.

Incremental growth, or “planning” as it’s commonly known, is present-state focused.  By definition, it’s not based on where you want your group to be but on where it is now.  The improvement trajectory is low.

It’s also an extremely limiting mindset.  Seen an ice deliveryman lately?  In 1900, the future looked bright to the employees of ice delivery companies.  The population of the United States was booming and food had to be kept cold.  They had a lock on the market for the only solution.  That is, until the invention of Freon in 1928 and the resulting birth of the home refrigerator which froze thousands of ice deliverymen out of their careers.

The better approach is to not rely on a plan of incremental growth, but to develop a strategic outlook – an outlook that is not present-state focused but which is based on your transformationally improved future.  In essence, this is the difference between past-based “planning” and future based “strategy.”

The required process, Focusing on the Future™, does not ask how to get from here (now) to there (a future).  Instead, it first requires you to establish a “there,” an ideal future reality.  What is that future like?  Then, it requires that you question how you got to that future; in other words, you pull your group into the future from the imagined future, not from your present “past.”  What obstacles did you encounter and what were the solutions?

Your group’s future exists.  Use it before it uses you.   Focus on the Future™.

Mark F. Weiss 

www.advisorylawgroup.com

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Continue reading »]]> Where do you want to be?

Forget about planning as that concept is popularly understood.  Planning is a concept that builds on your current position but there’s a far more valuable tool available.

I know that the prior post discussed telling the truth about your current position.  To avoid confusion, let me explain.

The determination of where you are today, where you really are, not where you imagine your group or practice to be, is essential in determining the starting point.  But what you want to avoid is building upon it and that is what traditional planning is:  it’s the creation of a plan of incremental improvement based on your current position.

The alternative that I suggest is a far more powerful tool.  Instead of basing progress upon incremental improvement of your present position, you must imagine your most powerful future and use that future to pull yourself toward it.  I call this the Focus on the Future^TM and the process Focusing on the Future^TM.  We’ll discuss it in the next post.

Mark F. Weiss

www.advisorylawgroup.com

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© 2009 Mark F. Weiss

Continue reading »]]> “Lieutenant, plot a course to Tahiti.”  Okay, but to do so, you’ve got to know where you are now.

The first step in determining your future doesn’t have anything to do with the future at all.

Instead, it has everything to do with the present, with where your group is now.  And that requires that you tell the truth about it, which is often the hardest thing to do, much harder than actually moving your group to the future.

Among the questions you should be asking yourself are:

• Does your group have a current strategic plan?  Has it ever had one?
• Why is your group’s organizational structure as it is?  When was the last time that your group reviewed its organizational structure?  What other structures are possible and would one better suit your goals? 
• Whatever the structure, when did your group last review its organizational documents, such as its partnership agreement or shareholders agreement?
• If your group has an exclusive contract, when does it renew?  In the past, how long before a renewal date did your group begin working on the renewal? 
• How much time and effort do your group’s leaders devote to group business and to guiding the group’s future, as opposed be being engaged in patient care activities?
• How would you grade the relationship among the group’s owners?  Among all of its physicians?  Among all of its personnel, both professional and other?
• At how many facilities does your group provide services?
• What’s the quality of the relationship between your group and each of those facilities’ administration?  Why?
• What’s the quality of the relationship between your group and the other members of the medical staff at each of the facilities?
• What’s the quality of the relationship between your group’s providers and your patients?
• What distinguishes the experience that your group provides from all that of all competitors in your market?  From all other groups in the country? 

Only once you’ve told yourself the truth can you establish where you are now.  Without that knowledge, even if you happen to know where you want to go, you can never get there.

Mark F. Weiss

www.advisorylawgroup.com

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© 2009 Mark F. Weiss

Continue reading »]]>  

After having represented medical groups with a particular emphasis on hospital-based groups for 30 years, it has become strikingly clear that what distinguishes the most successful groups, the Strategic Groups, from the great majority of the mediocre.

In fact, I have come to realize that there is a way of ranking groups from the most reactive to the most strategic. I call this ranking The Four Circles™:

The Reactive Group

A group at the reactive level exhibits many of the following characteristics: 

• It exists only as a matter of convenience to further each of its individual physician’s goals. 
• It has little, if any, organizational structure beyond the rudiments required by law, and even those formalities are rarely followed.
• The relationship among its members may or may not be civil but the mindset is definitely “what’s in it for me?” not “what’s in it for us?.” 
• The group is entirely reactive to its circumstances in respect of the hospital, competition, referral sources, and the medical staff. 
• Its sole purpose for existence is to provide services at a hospital — if that hospital no longer wanted to obtain those services from it, it would have no reason to exist.
• Their services are completely commoditized.  There is virtually nothing that distinguishes their services from any other group of providers within their specialty.

The Group in Equilibrium

A group at the equilibrium level exhibits many of the following characteristics:

• It exists primarily to further each of its individual physician’s goals although there is some understanding that they must band together as a group in order to compete – in essence, it is a “club” with members sharing at least one common goal:  keeping others out.
• The group follows the minimum required formalities to protect its structure from legal attack.
• The group members have more or less civil relationships among themselves.  They understanding, to a certain degree, that fulfilling their individual objectives requires that they align themselves with others.
• The group engages in a low level of planning as to its very short term future, chiefly in respect of scheduling matters.  For the most part, it is reactive to all circumstances outside of its easily accomplishable, immediate concerns.
• Its sole purpose for existence is to provide services at a hospital — if that hospital no longer wanted to obtain those services from it, it would have no reason to exist.
• Their services are commoditized.  There is little that distinguishes their services from any other group of providers within their specialty.

The Focused Group

A group at the focused level exhibits many of the following characteristics: 

• It exists to further the group’s immediate and midterm goals although group members are also free to pursue their independent goals outside of the group. 
• The group follows the required formalities to protect its structure from legal attack.
• The group members have good relationships among themselves, understanding that fulfilling their individual objectives requires that they align themselves with others.
• The group engages in a high level of planning as to its short and medium term future, chiefly in respect of scheduling matters.  However, it remains chiefly reactive to all circumstances outside of its easily accomplishable, immediate concerns.
• Its chief purpose for existence is to provide services at a hospital — if that hospital no longer wanted to obtain those services from it, it would have little reason to exist as its outside work is not sufficient to enable it to remain in business.
• Their services are commoditized.  There is little that distinguishes their services from any other group of providers within their specialty.

 The Strategic Group 

A group at the strategic level exhibits many of the following characteristics: 

• It exists to further the group’s long term goals. 
• The group follows the required formalities to protect its structure from legal attack.
• The group members have well developed, positive relationships among themselves, understanding that they will maximize their long term interests by maximizing the group’s long term interests.
• The group engages in a high level of planning as to its short, medium and long term future.  Although it remains flexible in order to deal with the inevitable surprises, it actively strategizes and deploys tactics to influence its future. 
• Its chief purpose for existence is to develop its business for the profit of its owner physicians and, as such, does not see its existence as necessarily tied to the existence of its relationship at any particular hospital.
• The way that their services are delivered is unique.  Although it may well be that there are many other providers of their specialty services within the area, the overall combination of the way that the group delivers those services and the experience that they provide to the facilities, to the other members of the medical staff, to their patients and to the community at large, has created an experience monopoly that competitors, even if they understood what was being provided, would not be able to duplicate it.

Where does your group fall on the continuum?

Mark F. Weiss

www.advisorylawgroup.com

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© 2009 Mark F. Weiss

Continue reading »]]> Seemingly discrete events in the life of running a hospital-based medical group are interrelated in terms of either leading to the group’s business success or resulting in its failure.

Each event, each instance, each interaction, whether within your group, between your group and the hospital, or between group members and other physicians, reverberates far beyond the scope of the immediate issue.  The nexus is that they are all elements upon which the success, or failure, of the group hinges.

Yet, the average group, even one “benchmarked” to best practices, fails to understand this.  [I'm a strong disbeliever in "benchmarking" as I find that in practice it encourages a cap on innovation.  Successful groups don't benchmark, they aim to exceed all current standards.  After all, if man had been content to benchmark to the best dragging sled, the wheel would never have been invented.  Why should you limit your success by benchmarking?]  Its leaders may address some of the events and attempt to manage them as discrete instances.  Other events are viewed as inconsequential and are allowed to “fade away,” as if that is actually possible.  When they bring in outside advisers, attorneys and consultants, they are generally as “silo blinded,” both by the traditional boundaries of their professions and their inability to understand interconnectivity, as the group is itself.

Consider the following event:

You are the leader of an anesthesia group with an exclusive contract at a large community hospital.  You also serve as Chair of the anesthesia department.

One of your physicians, Dr. Green, gets into a verbal altercation with a hospital employee.  It’s unclear who started the argument.

The COO says that Dr. Green’s behavior is indicative of the poor working relationship between the group and the hospital’s staff.

Most groups would either handle the situation administratively, perhaps counseling Dr. Green, or perhaps treating it as a medical staff issue.  And that would be it.  Situation closed.

But what is the later impact of the altercation on the following situation?

Three weeks later, you attend a medical executive committee meeting.  A surgeon who always leaves his assistant surgeon to close (and who therefore has not witnessed for years what goes on in the O.R. after he leaves) blames what he sees as slow case turnover in the operating room on the anesthesia group.  There’s general agreement among the committee members that there’s a problem with anesthesia department leadership.

Although later posts will address many of the strategies and tactics that groups must develop and implement in order to deal with, and to take advantage of, the interrelatedness among events such as these, it is easy to understand from this vantage point that the news of Dr. Green’s altercation had to have had an impact on the viewpoint of the members of the medical executive committee.

How might the group have responded to the altercation incident if it had occurred to its leaders that it engendered an opportunity to protect the group’s interests . . . and even to advance them?

As I’ll discuss in future posts, because seemingly discrete events, instances and interactions are related, they can be managed in the sense of managing the risk they pose to your group and, in many instances, flipped to become positive events that have the effect of advancing your group’s interests.

Mark F. Weiss

www.advisorylawgroup.com

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© 2009 Mark F. Weiss

Continue reading »]]> We change vendors like we change underwear.  We value our partners.

Don’t let your group become a vendor.  You are not a service provider to the hospital. 

If you think your group is a service provider to the hospital, take two readings of this post.  If you don’t understand that the situation must change, don’t call me in the morning. 

If you understand that you can influence your group’s future and that with the proper stragegy it’s a bright one, then let’s talk.

The dirty clothes hamper beckons those who don’t heed the call of greatness.

Mark F. Weiss

www.advisorylawgroup.com

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© 2009 Mark F. Weiss

Continue reading »]]> Earlier this week, I read a thought provoking post on Ken Cohn’s Healthcare Collaboration Blog.  Ken, a practicing surgeon, is passionate about helping physicians, nurses, hospital leaders, and board members work together.

In my practice, I see a tremendous amount of tension, especially when it comes to the relationship between administration and hospital based groups.  On one level, this tension results from the business relationship between them – the exclusive contracting process and especially the issues relating to stipend support.

Unlike Ken, rather then wish this tension did not exist, I find it rather healthy in that it creates a robust atmosphere for the negotiating process. 

On another level, that of the operational relationship (perhaps better thought of as the “professional” relationship) between the hospital and the hospital-based group (and here’s where Ken and I are more or less on the same page, I believe) I work hard with my clients to create not simply smooth, but “delighting” relationships. 

However (and here’s where Ken and I part ways again) those “collaborative” relationships are themselves a part of the negotiation process (for the renewal of the contract relationship) and can be used both passively and actively (e.g., “delight” as a weapon) to achieve the group’s and the hospital’s goals. 

Hospital administrators often manipulate the operational relationship in a quite aggressive way, setting up failure, triggering breaches, etc.   My clients understand this and have tools to combat it.  After all, this sort of behavior on the part of administrators simply indicates that they, too, share my long term view of what negotiation really is. 

The relationship between a hospital-based group and each of the facilities at which it practices requires this long term view (see The Strategic Group Process™).  Each of the touch points between your group and a facility, as well as between your group and other members of the medical staff and between your group and your patients and their families, is, in actuality, a part of the negotiation with the facility. 

Harness your power to influence those relationships and transform your practice.

Mark F. Weiss

www.advisorylawgroup.com

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© 2009 Mark F. Weiss

Continue reading »]]> Customers — my clients generally refer to them as patients, but that doesn’t make any difference — expect service.  You might provide them with the world’s best medical care, but if you piss them off they probably won’t be back, and they will probably let others know about it.  If you piss them off before they even become customers, it’s even worse.

So let me tell you a story. 

Recently, I made a call in the course of looking for a new physician.  I was transferred from person to person three times within the multi-physician office before reaching the person who schedules appointments.  Each time I had to listen to the same recording about hanging up and dialing 911 if it were a medical emergency.

When I finally reached the scheduler, I gave her my name and told her that I had received Dr. X’s name from my insurance carrier’s online provider lookup, which indicated that he is taking new patients, and asked to make an appointment. 

Her response: “Date of birth.”  I said, “Excuse me?”  She deadpanned, “Date of birth.” 

My initial inclination was to say goodbye, but I was intrigued at how much worse it could get, so I gave her the information.  I suppose she was just trying to screen out Medicare patients contrary to all the warm and wonderful things it says about their group on their website.

She then informed me that Dr. X wasn’t taking any new patients regardless of the fact that my carrier reports he is.  She told me my only choice was to see Dr. X’s new associate, Dr. Y.  Wrong.  I had another choice –I hung up.

As I’ve written in other posts, this is the time for aggressive medical groups to grab the market.  I don’t care how wonderful your claims of expertise are or even how wonderful your claims of  providing caring service are, if you can’t properly treat your customers, whether present or potential patients, someone else will.  This is the case whether you’re a solo office practice physician or the leader of a 100 member hospital-based group.

Think of it this way:  If you have to benchmark (although I hate the entire notion of benchmarking) don’t benchmark to any other medical group.  Benchmark to the Four Seasons or Nordstrom.  If you don’t get it, someone else will.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Why is it politically correct to support the general acute care hospital position in the argument against specialty hospitals, while at the same time supporting specialty stores in the “war” against Walmart?

Aren’t these arguments mirror images? 

The PC argument is that Walmart is “bad” because it adversely impacts specialty stores, which are locally owned, provide locally tailored products and provide personal service.  The general acute care vs. specialty hospital argument is exactly backwards from the Walmart vs. specialty store argument:  Specialty hospitals provide highly tailored “products” and provide personal service, therefore they adversely affect general hospitals, which must provide a wide range of care to a wide range of patients.

Isn’t supporting the general acute care hospital argument akin to supporting Walmart in an argument that the local jewelry store should close because it doesn’t have to bear the burden of stocking yards of shelf space with commodity-priced watches?

Competition isn’t the problem in the healthcare market.  The problem is the lack of competition resulting from over-regulation. 

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> In my article Hallway Chat = Boardroom Meeting, appearing in the Advisory Law Group e-Alert for October, 2008 (accessible from this link to the newsletter archive), I wrote that there is no such thing as an “informal” conversation with a hospital administrator:  Any communication with, or within earshot of, an administrator is a part of the negotiation process.  

Understanding this rule is the first step.  It allows physician leaders to both protect their negotiating positions and to use “informal” communication with administration proactively to inform and dis-inform in the context of a controlled negotiation.

The second step is for physician leaders to make certain that group members engage in a coordinated effort to consistently apply effective language — specific language that furthers the group’s interests — in that communication as well as in communication with other interest holders within, and outside, the facility.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> I recently read an article about a woman bemoaning the fact that she had been “cheated,” as her investment in General Motors bonds was about to become worthless.  The system had failed her, she cried.

Later that week, there was an Easter Egg hunt at the Santa Barbara Botanical Gardens.  As the hunt began, the docent announced to the throng of children that the eggs were well hidden in the thick brush and were hard to find.  She then told them that they had hidden 8 eggs per child.  “If you find any more,” she warned them, “you’ll have to give them to another child.”

The fact is that life is not “fair,” and we cannot make it so despite how much we “reallocate” from those who made different choices or from those who have better skills or a more attuned work ethic. 

But when I thought of it a bit more, I realized that the attitude expressed by the bemoaning bondholder and the politically correct docent is not really that different from that of many hospital-based physician groups which view their continued ability to provide services at a facility as a right.  In the same manner as the bondholder and the docent, they see fairness as requiring an equality of outcome, not simply of opportunity.

Life doesn’t work that way for physician groups, either.  Focusing simply on doing the procedures (and “benchmarking to best practices in our specialty”) is no longer enough to assure success.  Instead, a highly proactive approach is required to position your group for success.  And the time to start is now.

Mark F. Weiss

www.advisorylawgroup.com

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Continue reading »]]> A few weeks ago I wrote in the Advisory e-Alert (March 24, 2009 issue — see this link to the e- Alert archive) about what will happen to your group when the hospital closes.

But what if it stays open and a paraprofessional has taken over your job?

In a move to increase their efficiency (and profitability) physicians welcomed paraprofessional “extenders” (e.g., PAs, CNRAs, radiologist assistants).  But subsequent trends, including carriers and government programs seeking lower “costs” and the fact that paraprofessions, once established, generally seek to expand their scope, are combining to create competition against their former “masters.” 

Strategize your future before someone else owns it.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> I recently read a review in a magazine for consultants of a new book by an “expert” who advises that since business today moves at the speed of light, the “old” stategic question of “where do you want to be X years from now?” must now be “where do you want to be a few days from now?”  What total B.S.!

Perhaps if doing business is limited to posting on Twitter, imagining until next Tuesday is a long term view.  But it is sheer lunacy if you are running a real business, especially a medical group or other healthcare business.

Too many physician groups either have no strategic plan and are therefore totally reactive to events, or have a plan of sorts that actually consists of unintegrated tactics.  This has contributed in no small part to physicians’ loss of control over healthcare. 

Strategy is the map of your intended destination, not simply of each individual stop along a way that is left to chance.  Tactics are steps in the implementation of strategy. 

You want to be able to implement tactics and to change them as necessary as quickly as possible — on a few days or even a few moments notice.  But those tactics are only important if they are aligned with your group’s overall business strategy; they are not a substitute for a strategy.  And, if you plan on being in business a few years from now, your strategic view has to be at least that long … or much longer.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> If you’ve read my articles on exclusive contract negotation or read about the Strategic Group Process, you know that my view is that almost all of the instances of a group’s organization and operation are related . . . that either they are managed in order to achieve success or they are treated silo-like (or even ignored), resulting in stagnation and failure.

In an educational setting (not a client enagagement), I was recently asked whether a physician member of a group, a partner, could opt out of a new managed care agreement being entered into by the group.  I was told that the carrier didn’t care if he did. 

I found the question to be rather funny.  The real question is not one of managed care contracting; after all the affected carrier consented.  Rather, the real question is whether the group cares that it is slowly ceasing to be a group.

Letting each partner write his or her terms of partnership is not a long term strategy for success, it’s a short term stategy for failure.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Imagine managing a baseball team.  You’ve got some star players and some very good ones.  Never in a million years would you even consider paying them all the same amount or giving them all the same contract terms.  After all, some players are far more valuable to the team than others.  Giving them all the same deal would cause the stars to look elsewhere and would disincentivize the lesser players from improving.

Back in the real world you manage your medical group.  You’ve got some star physicians and some very good ones.  Too often medical group leaders think they have to pay physicians (at least ones in the same tenure category) the same and give them all the same contract terms. 

Why? 

Is your “team” really that different?

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Every touchpoint a physician or medical group has with a patient is an opportunity to build the relationship — it’s also an opportunity to dramatically increase the chances, and speed, of patient collections.

Co-pays and cash-pays may be a small percentage of your income, but if you’re not interested in them, you can just give them to me.  I’m not kidding, but you get the point. 

So what can be done to increase the chances that you’ll get paid and build the relationship at the same time?  Especially for radiology, pathology and anesthesiology groups whose services are often either “invisible” or unrecognized as a physician (as opposed to hospital) service, but true for any practice, think of what “take aways” can be delivered to your patients before they receive your bill.  What contact can be had with them prior to service?  How can they be educated on the value of your services, not just the price? 

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Develop your group’s internal resources.  For example, make certain that your group is tightly structured to keep its weakest members from splintering under pressure.  In turbulent times, individuals are often too concerned about their own survival to be focused on the group’s success.

Do what it takes to coach your physicians to support the group’s initiatives – if they can’t or won’t, you need to make the tough decision about whether or not to let them pull you down the drain. 

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]>  

The sky is falling — I know, I heard it on the news today.

The healthcare market is in a state of flux. 

Earlier states of flux resulted in Medicare, seen in classic shortsighted terms by physicians as a new source of funding but which ended up becoming a weight dragging down reimbursement, a target to which commercial carriers aspired. 

Earlier states of flux also saw physicians’ abdication of responsibility in the face of the onslaught of managed care which, doing the negative impact of Medicare one better, reduced both physician incomes and physician control over the practice of medicine and the destiny of healthcare.

So what’s a hospital based medical group to do?  I suspect that the majority will “benchmark” to the leaders in retrenching and will do absently nothing other than cut costs, lay low and pray for better days.  

But there is no advantage in lowering your expectations in terms of income and favorable exclusive contract provisions, as someone else’s expectations can, and will, always be lower.

That’s exactly why groups that want to succeed should be doing the opposite: This is the time to become aggressive both in terms of obtaining long term exclusive contracts, seeking to expand to other facilities and, importantly, obtaining commitments of significant financial support over the terms of those exclusive contracts.

Hard to do?  Not if you take the proper approach and devote the proper time and effort. 

Mark F. Weiss

www.advisorylawgroup.com/strategicgroupprocess.html

Continue reading »]]> Okay, we’re in a recession.  But that doesn’t mean that you should believe ALL of the doom and gloom reported by the media.

For example, in the January 21, 2009, issue of California Healthline, the popular online publication of the California HealthCare Foundation, author George Lauer stated in his piece, Financial Times May Get Harder on California Providers, that:

“According to a special recession-related report the California Hospital Association released, uninsured patients visiting emergency rooms are up 33%, almost three out of four Californians are having difficulty paying out of pocket health care costs, and elective procedures — one of the few service areas in which hospitals can actually make money — are down 30%.”

Shocking, both because those figures are so high and because they are so wrong.

The California Hospital Association study cited by Lauer actually found: 

•  A 73% increase in consumers having difficulty paying.  This does NOT mean that “almost three out of four Californians are having difficulty paying.”  It means that the number (whatever it was to begin with) of people having difficulty paying, as observed by those hospitals responding, increased by 73%.

•  That 33% of hospitals responding report an increase in ER visits.  This does NOT mean that the visit count is up 33%.  It could be up .01% or it could be up 1,000%, at those hospitals.

•  That 30% of hospitals responding reported a decrease in elective procedures.  This does NOT mean that there has been a 30% decrease in the volume of elective procedures.

So, let’s all keep our heads on.  And, for those who need it (like reporters), a class on statistics might come in handy.

Mark F. Weiss

www.advisorylawgroup.com

]]> http://www.advisorylawgroup.com/blog1/?feed=rss2&p=64 0 http://www.advisorylawgroup.com/blog1/?p=59 http://www.advisorylawgroup.com/blog1/?p=59#comments Thu, 22 Jan 2009 18:03:33 +0000 dieseldog http://www.advisorylawgroup.com/blog1/?p=59

Continue reading »]]> What’s a medical group worth?

Ah, one of the eternal questions.  Okay, maybe not, but it can be an important one.

The problem is that it’s a question that sooner or later will be asked.  Like the opportunity to legally create evidence now in the event of a later dispute, creating rules for valuation in advance comes in handy.  Or, maybe not, if you haven’t given sufficient thought to the ways that those rules will return a value in the real world tomorrow, a year from now, a decade from now, or longer.

Valuation can have an impact on more than simply the question of what a departing shareholder or partner gets.  Of course, it has an impact on what a new admittee to an equity position must contribute.  But its impact can be much greater:  In some jurisdictions, the form of the entity combined with the valuation formula can determine whether or not covenants not to compete are enforceable.  The formula, and the payment terms, could also make it impossible for the entity to survive when a payoff is triggered.

Cutting corners now can be the same as cutting your throat later.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> Here’s a vaccine for office based physicians thinking of entering into an office sharing deal or a practice merger deal, with one or more other physicians:  Document the deal before it actually commences.  And, if the deal changes, document the change.

These simple rules are most often honored in the breach. 

Needlessly so, as the effort, and cost, required to resolve a deal gone bad dwarfs the effort and expense of planning, constructing and documenting the deal at the start.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> A few weeks ago, I attended a funeral.  I couldn’t help that my mind wandered to the fact that many physicians and physician group leaders run their practice’s business operation as if they were locked up in a box . . . sorry to be so morbid . . . coffin-like, in that they just keep on doing what they’ve always done in terms of treating patients, essentially ignoring many if not all real business issues, and will keep on doing the same until they run out of air.

In the macro sense, leaving the business issues to someone else resulted in managed care and may soon lead to a national health plan extending decreasing, Medicare-like reimbursement across the board. 

In the micro sense, leaving the business issues to someone else threatens the viability of your practice. 

It’s not “outside of the box” thinking that’s required, it’s busting out of the box.

Mark F. Weiss

www.advisorylawgroup.com

Continue reading »]]> You’ve asked for it:  The three most important things I recommend you do for your medical group to thrive in a down economy.  Here they are.

1.  Control what you can control.

2.  Of what you can’t control, influence all you can influence.

3.  As to everything else, don’t worry about it.

Recently, a radiologist earning in the range of a mid-level hospital administrator criticized my advice as being “common sense.”   But he is living proof that, to quote Voltaire, common sense is not so common.

Thriving is that much easier when your competition is clueless.

Continue reading »]]> GM ran its business into the ground by becoming focused on everything other than building cars that their customers wanted.  They didn’t even understand who their customers were (in the car business, manufacturers hold to the belief that the dealers are their customers).   But when people stop buying cars, the dealers stop buying cars and the whole system slows or shuts down.

Instead of focusing on cars, GM became a large social welfare company devoted to providing benefits to their workers, both active and retired.

Sound familiar?

In the healthcare industry there is a similar argument about who the customer is:  The patient?  The hospital?  The referring physician?  The payor? 

And in the healthcare industry, there is a push, both by private payors and the government, to balance the financial equation on the heads of physicians:  Reimbursement is cut, regulation (and the cost of compliance) is increased, yet physicians are still expected to provide the social service. 

So, will there be a physician bail out any time soon?  Don’t hold your breath.

Continue reading »]]> It’s 2:30 p.m. and you’re in the O.R. in the middle of a case.  Your phone rings and it’s the [hospital administrator/your CPA/your biller] asking you to make a decision that will impact your practice and perhaps even your bottom line.

Stop.

Don’t make it.  Even if you must give a response (which, I guarantee you is extremely rare), it should be a qualified one, such as,  ”My initial thought is [xyz], but I need to consider my position carefully and get back to you.” 

You need to take the time to work on your business, not just in it.

Continue reading »]]> It’s widely expected that the decline in the stock market and the recession in general will force large numbers of physicians to work beyond their projected retirement dates. 

How will that affect your practice?

Some immediate thoughts for you to consider:  More competition for patients?  For your exclusive contract?  A “solution” for the shortage of practitioners?  Even lower reimbursement?

Continue reading »]]> I’m facinated by the role that luck plays in success.  For a good background on this topic, read Nessim Nicholas Taleb’s Black Swan, or even better, his Fooled by Randomness. 

But I’m even more interested in those who simply rely on luck for their success:  That’s just plain stupid.

Yet it’s what most hospital-based groups do.  They think that just because they have been practicing at their faciliity for x number of years, that years x + 1 though infinity are in the bag.

There’s lots that you can do to load the dice if you take the time, and make the effort, to strategize and implement your own future.  

Sure, Woody Allen quipped that 80% of success is showing up.  Even if that’s so, that other 20% is up to you.  And that other 20% requires thorough preparation and positioning.

Continue reading »]]> Let others bemoan the bad economy.  Use your time to take advantage of the opportunities. 

Physician groups that were focused only on the easy business or which avoided making the necessary investment in strategies to provide significant supplemental income, are those most likely, even destined, to fail. 

The key is not to devote efforts to complaining (it will do you no good, only harm) or to take actions to merely “survive” (the wrong focus entirely) such as cost cutting without regard to the impact on return on investment. 

Instead, the key is to develop and implement strategies to thrive, to fill the vacuum that the others’ failure and their blindness to opportunity will leave for you.  This is the time to develop stronger relationships with your fellow shareholders/partners, to make certain that key employees/subcontractors remain bound to the group, to revist the economic relationships with your hospitals and payors, and to pursue new income streams that exist but have either been unimaginged or left undeveloped.

Prudent investment in “thrival” trumps both failure and mere survival.