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| Dear Friend,
Money.
There’s a management saying that what’s measured improves. As a result, managers love to measure things. But measuring does not always indicate value.
Take for example a family of three with total income of $200,000 a year. The parents have another child. Should grandma call the parents to commiserate because the family’s per capita income just dropped from $66,666 to $50,000?
So clearly, you’ve got to be measuring the right thing.
The family comedy described above has a medical group analogy. Groups must distinguish between measuring things which are efficient and measuring things which create a much improved or larger experience for the recipient.
What if you were running a restaurant instead of a medical group. Let’s say you decide to measure and reward on the basis of the time a waiter or waitress takes to picks up food in the kitchen and deliver it to the table. Soon, waiters would be jogging through the joint, tossing plates onto the tables. Slopping the food onto the table with a smirk would still be 99th percentile performance, but the total customer experience would be at rock bottom.
So clearly, some things that measurement says are now “improved” aren’t anything of the sort.
Now back to running a medical group. Take a look at your group’s compensation plan. If you simply measure units produced by your group members–that is, you pay by units only–then you are encouraging fast delivery, not courteous service: tossing the plates, so to speak. On the other hand, if you’ve adopted a fixed compensation system, $X per month as salary, you’ve taken away the incentive to work harder, and you’ve ignored the notion of an incentive for better performance. Of course, that still begs the question, what is better performance?
Correctly formulated, a group compensation plan is not just about encouraging efficiency, it’s about encouraging effective performance in a broad sense. Some of that performance is capable of meaningful objective measurement, but a significant portion is not — but that portion can’t be ignored, it still has to be considered and group members must be cognizant of its impact on their overall compensation.
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| | | Business Life in the Time of Coronavirus Mini-Series
The coronavirus crisis caused a short term economic crisis for many medical groups. Our mini-series shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
[If you haven't already seen them, follow this link to watch our entire series.] |
| | Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript:
I saw a story out of Arkansas about a unanimous vote by a hospital’s medical staff, a vote of no confidence, in connection with the hospital's relatively new CEO. (The hospital is a CHS facility called the Medical Center of South Arkansas.)
Apparently, the new guy came in, shook things up, and now the medical staff wants to shake things up for him by having him fired.
I don’t really want to talk about the Medical Center of South Arkansas; what I want to talk about is the power of leverage.
Here we have what is normally, in the context of a hospital, a group without power. It might seems strange, but a medical staff, in terms of exercising control over the hospital’s administration, especially in a time of hospital-centric healthcare, doesn't usually have much clout.
Yet what we see in the Arkansas story is another example of what Robert Taber, the author of The War of the Flea, the seminal work on guerrilla warfare, described. That's the notion that a very small and organized group (the flea) can sometimes topple a large enemy (the dog) by being too quick and ubiquitous for the enemy to defend against.
It’s an issue of leverage.
I’m not suggesting that you go and hold a vote of no confidence. I’m suggesting that what often appears to be a very powerful and intractable enemy can be toppled by applying the right kind of leverage.
Think about that concept and how leverage can work for you.
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| | How to Deploy the Secret Sauce of Opportunistic Strategy
Webinar On Demand
They say that COVID-19 has changed the world, creating the "new normal." Many of your colleagues and many hospital administrators are running scared.
Others, leaders like you, know that crisis means opportunity.
Let me provide you with the strategic tools and insights that you need in order to seize opportunities, whether they’re in the context of your current business relationships, the expansion of your business activities, or the creation of new ventures.
You will learn:
•Defense as a defective default: It’s necessary, but not sufficient.
•Exploiting weakness: Drop the guilt and identify opportunity.
•Flat line negotiation is fatal: Understand its myths and limitations.
•Negotiation reality: Learn to identify and deploy on multiple planes to affect the outcome.
•Maneuver: Harness the power of maneuver, both in overall strategy and in specific negotiation strategy.
Others see a crisis and freeze in fear. Learn how to see the opportunities and obtain the tools to increase your odds of obtaining them.
The price to attend is $479. The cost of not attending is astronomical. |
| | | Wednesday – Insurers Help Themselves By Helping You Help Patients...At Your ACS – Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Need a marketing consultant to help grow your ASC? You might want to check with your carriers first.
Background
As the latest step in a trend that began several years ago, effective for 2021, CMS added 267 new codes to Medicare’s ASC covered procedures list.
These are the codes for procedures that Medicare recognizes for payment in the ASC setting. Put another way, no code, no payment. Put even another way, with a code, it’s not only Medicare that follows, that is, pays, commercial carriers look to Medicare in that regard.
And, put even another way, procedures that previously could be performed, meaning performed and reimbursed, only in a hospital setting, whether inpatient or outpatient, can now be performed in an ASC.
In addition, CMS has announced the phase out over 2021, 2022, and 2023 of the Inpatient Only List, the list of procedures, that to be reimbursable, must be performed in a hospital on an inpatient basis.
Those procedures that were once inpatient only will be going to HOPDs and to ASCs. Over time, when CMS reaches payment parity between HOPDs and ASCs, all will be ASC procedures.
Carriers Helping Push Procedures Out of HOPDs Today
Complain as you might about carriers raising premiums and cutting reimbursement, often on the same day, they know a good deal when they see one.
Take, for example, New York’s Empire BlueCross BlueShield, which announced a new coverage policy to push more procedures out of the HOPD setting to ASCs by making ASCs the default site of service for a host of outpatient procedures for commercial plan patients.
Patients need a medical necessity review to have their procedure performed in an HOPD. No medical necessity review applies if the procedure is performed in an ASC.
According to a carrier spokesperson, “Empire BlueCross BlueShield is committed to being a valued healthcare partner in identifying ways to achieve better outcomes, lower costs and deliver access to a better healthcare experience for consumers.”
What This Means For You
How the story’s changed!
Just two decades ago, carriers saw ASCs, predominately owned by physicians, as “conflicts of interest.” How could they, they claimed, trust a physician to admit his or her own patient to a facility he or she owns?
But now, it’s clear that ASCs provide better care at lower cost, in a setting that’s preferred by both patients and physicians.
Some see the payment policy shift, governmental and commercial, as motivation for hospitals to acquire or build their own ASCs.
As to 100% hospital-owned ASCs, physicians who’ve already given up control of their practice to the hospital through employment will have no choice but to go along, meaning without ownership.
But as to all other physicians, as well as in connection with potential joint venture ASCs, why would physicians want to partner with a hospital at all? It can’t be for their ASC management skill; they have none. And, if the hospital proposes a three way JV to independent physicians, you’ve got two “partners” and a diluted physician ownership percentage.
As I see it, we’re about to witness a huge increase in the already tidal shift in the site of surgical service to the ASC setting. Partnering with the right long-term, and, therefore, non-PE backed, management company makes sense, as they bring skills to the table that you’re lacking.
However, be careful to avoid a manager that’s as bureaucratically impacted as a hospital (or an insurance carrier!) or you’ll risk losing both your competitive advantage and the fun, yes, fun, of doing your cases in an enjoyable environment.
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| | | Listen to the podcast here, or just keep reading for the transcript.
At first, I thought it was a joke.
The healthcare world was supposedly abuzz last week when the New England Journal of Medicine published (on Jan 2, 2020) the report of a study that shows that consolidation in the hospital industry doesn’t lead to higher patient satisfaction or to higher quality.
Gee, who woulda thunk it?
After all, we know that if we want a high quality meal, we don’t go to a 10 table Michelin starred restaurant, we go to a very large and efficient joint, like McDonald’s. Oh, we don’t do that?
Despite what hospitals argue when they’re looking for regulatory and political support, they don’t merge to create quality: They merge to reduce competition and to raise prices.
But mostly they merge because the hospital industry is in chaos.
The number of hospital closures and bankruptcies continues to climb. The percentage of cases flowing out of hospitals to physician-owned, freestanding facilities continues to grow.
As a result, hospitals cling together for survival like B-list actors in a low budget horror movie.
Here are the real lessons for you:
- Don’t go into the hospital business.
- Be very wary of allowing a hospital into any physician venture.
- Don’t hire a hospital administrator to run your physician-owned ASC or other facility (which is another way of looking at point #2)
- Focus on why the hospital business is in disarray: It no longer has a compelling business model.
And, then, with your free time, consider becoming my collaborator on a research grant request. We’ll study why anyone would perform a study to see if hospital mergers lead to higher quality. Apparently, there’s a lot of money available for this kind of stuff and there’s no reason why we shouldn’t try to get our fair share.
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| | | Calibrate Your Compass
Read our exclusive RedPaper to guide you through this evolving situation.
The coronavirus crisis caused a short-term economic crisis for many medical groups. Our RedPaper shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
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| | Help Us Help You With Helpful Content
What tailored content would you most like to see during this
time? How can we focus on solutions to your most pressing strategic concerns?
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| | | | We all hear, and most of us say, that the pace of change in healthcare is quickening. That means that the pace of required decision-making is increasing, too. Unless, that is, you want to take the “default” route. That’s the one is which you let someone else make the decisions that impact you; you’re just along for the ride. Of course, playing a bit part in scripting your own future isn’t the smart route to stardom. But despite your own best intentions, perhaps it’s your medical group’s governance structure that’s holding you back.
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| In fact, it’s very likely that the problem is systemic. The Medical Group Governance Matrix introduces a simple four-quadrant diagnostic tool to help you find out. It then shows you how to use that tool to build your better, more profitable future. Get your free copy Free.
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| | | | Whenever you're ready, here are 4 ways I can help you and your business:
1. Download a copy of The Success Prescription. My book, The Success Prescription provides you with a framework for thinking about your success. Download a copy of The Success Prescription here.
2. Be a guest on “Wisdom. Applied. Podcast.” Although most of my podcasts involve me addressing an important point for your success, I’m always looking for guests who’d like to be interviewed about their personal and professional achievements and the lessons learned. Email me if you’re interested in participating.
3. Book me to speak to your group or organization. I’ve spoken at dozens of medical group, healthcare organization, university-sponsored, and private events on many topics such as The Impending Death of Hospitals, the strategic use of OIG Advisory Opinions, medical group governance, and succeeding at negotiations. For more information about a custom presentation for you, drop us a line.
4. If You’re Not Yet a Client, Engage Me to Represent You. If you’re interested in increasing your profit and managing your risk of loss, email me to connect directly. |
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