Exclusive Anesthesia Contracts Under Attack

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 

www.advisorylawgroup.com

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Tearing Up Your Exclusive Contract For Profit

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 

www.advisorylawgroup.com

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Human Pack Behavior

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 

www.advisorylawgroup.com

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The First Step

“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 

www.advisorylawgroup.com

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Ignoring the Perceived Bounds of Weakness

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 understanding of the opposite limits — the bounds of weakness and the far more likely, and more devastating, result.

Mark F. Weiss

www.advisorylawgroup.com

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In the Bureaucratic World

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 

www.advisorylawgroup.com

 

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“When Negotiations Begin”

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 

www.advisorylawgroup.com

 

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Dogs And The Power of Observation

“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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“Thank You!”

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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Competing Against Yourself

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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