Jan 28 2009

Hospital Based Groups Must Get Aggressive


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





Jan 27 2009

We’re in a Recession, But Don’t Believe Everything You Read in the Press

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


Jan 22 2009

What’s a Medical Group Worth?

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


Jan 12 2009

Office “Spaced”

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


Dec 30 2008

Trapped Inside the Box

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


Dec 05 2008

Mark Weiss’ Three Most Important Tips for Thriving in a Down Economy

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.

Nov 18 2008

Maybe They’ll Bail GM Out, But Will They Bail You Out?

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.

Nov 13 2008

You Can’t Solve Problems Working on the Fly

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.


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.

Nov 12 2008

Physician (non)Retirement – Impact on Your Practice

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?

Nov 06 2008


I’m fascinated 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.