Who Asked The Patient If She Wants A Hospitalist? – Podcast

The battle between patients’ physicians and hospitalists rages on. But who asked the patient?

The “Why” in Hospital Employment

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.

Mark F. Weiss

The Chicken and The Pig and The ACO

I recently heard it said that 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.

Mark F. Weiss

 

The Only Thing The Hospital Has To Fear Is Fear Itself – Podcast

Do you know the secrets of using fear of loss as a tactic in hospital negotiations?

Et Tu, Dr. Brute?

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?

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

Mark F. Weiss

 

Time Travel

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?

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

Mark F. Weiss

Hospital Employment Is No Panacea For Physicians – Podcast

Employment by hospitals is no safe harbor for physicians; in fact, it’s quite the opposite.

Picking Off The Fruits Of Your Success

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 at which 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 to 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.

Mark F. Weiss

The Only Thing The Hospital Has To Fear Is Fear Itself

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 ContractTM 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 ContractTM, 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.

Mark F. Weiss

The Promise-Delivery Gap – Podcast

National groups often over-promise and under-deliver. Take advantage of it.