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| Dear Friend,
Do you pour your focus into the long-term strategic planning involved in business decisions today?
That's the subject of this past Monday's blog post, Playing the Long Game. Follow that link to the blog, or keep reading for the entire post.
If revenge is a dish best served cold, why are so many focused on instant gratification?
I was talking with a friend in the medical billing business about laws pertaining to out of network billing by physicians, “surprise medical bills,” they’re called. In the classic sense, Mr. Smith has surgery from an in-network surgeon at an in-network hospital, but the anesthesiologist is out of network. Mr. Smith is then “surprised” when his carrier pays the anesthesiologist 2 cents, and he must pay the rest of the full usual and customary anesthesia bill.
The point I’d like to make is not about any particular state, or the federal “No Surprises”, law or the fact that it pains carriers to pay even 2 cents. Instead, it’s about how payors lobbied for and are reacting to the new scheme. It indicates that they know how to play a very long-term game.
Although there are slight differences between the many such laws, the general concept is that carriers must pay the impacted out-of-network providers at mandated levels often based on notions of average contracted rates.
In lobbying for them, the payors clearly understood that these laws would result in putting physicians in a vice grip: Average rates could be gamed.
Many are now refusing to renew contracts that are currently at levels that would skew the average upward. They’re offering very low rates to some groups while keeping rates high where they must — the lower rates will bring the average down. It appears as if their long-term plan is to push the “average” down to where nobody in the popular press (or at some physician specialty associations) thought they’d ever go: close to Medicare.
Payors played the long game. Politicians played the short game (great soundbites, more votes, and retirement before shortages of care hit the fan). Many medical groups and professional societies didn’t play the game at all or, if they did, they focused only on the short-term game, e.g., today’s rates (“carriers must now pay us mandated rates!”), not the longer-term game (“the mandated rate is now only 2 cents!”).
But payor rates are just an example. The notions of long-term and second order thinking apply to how you deal with a hospital in connection with their long-term plan for the service you provide, which doesn’t have to be a traditional hospital-based service. The notions apply to how you are staffing. They apply to deciding what facilities to target. And so on.
In doing strategic thinking for your group, it’s essential that you not only think about this year, next year and a few years down the line, but also farther out. Think ten years, fifteen years out. Sure, you might not be able to control most of what is going to happen over that long-term period, but at least factor it into the way that you determine your strategy.
Some things that are going to have an effect in the future (the long-term) can be seeded, structured and manipulated now (the short-term), if you’ll only engage in that level of thinking.
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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:
Let’s talk today about keeping your strategy fresh. I spoke with a friend from Colorado yesterday (you know who you are!). The discussion was about strategy, our favorite topic, and we’re both big John Boyd buffs. Boyd was the Air Force fighter pilot who developed the strategy tool called the OODA loop, Observe, Orient, Decide and Act, which he gleamed from his success as a fighter pilot before he became a pure military strategist. That was the system, the strategy, that he used when flying planes in training to get behind the student (the "enemy") to be able to metaphorically shoot him down. Boyd realized that the same process worked in military strategy in general, and I maintain it works in business strategy as well. So the object here is to observe what’s going on, observe the environment to orient yourself in terms of where you are and where the target is, and to then make a decision based on that information, and then to act on that decision. However, it's not just 1, 2, 3, 4, OODA; it’s the notion that it is a loop and that as the loop keeps iterating, you keep gathering more information and acting quicker and quicker. The faster you can move through that loop, the stronger your position is vis-a-vis your enemy, your target, your goal in the business setting. OOOD involves the concept of maneuverability, the ability to not only go in a direction toward a goal, but to quickly change direction because the goal has changed or moved (which information you’ve gathered from moving through the loop). We see this in business, not just warfare, especially as we see environments change. For example, in the hospital business, it was once extremely important for hospitals to capture as many primary care physicians as possible to serve as “feeders” into the hospital system. We saw hospital systems grow, almost in hub and spoke fashion, with a figurative “mother hospital” and “children hospitals” out in the community to act as “feeders” back to the mother facility. But, over time the environment changed. As a result, we see an increasing number of hospital bankruptcies and of hospital systems merging "to become stronger" (which is a euphemism for survive). So what does that tell us about your strategy? For example, your strategy as a medical group leader. It's that when you develop strategy, you can’t just allow that strategy to be your only strategy, your "forever strategy". You must keep observing, orienting, deciding, and acting in order to keep that strategy fresh as the environment changes. Either that or end up with a perfect strategy for a time that no longer exists. If you want to talk about an analysis of your current strategy, or of ways to go far beyond what the normal notions of what strategies are, get in touch. See what we can do to help you |
| | How to Deploy the Secret Sauce of Opportunistic Strategy
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They say that COVID-19 has changed the world, creating the "new normal." Many of your colleagues and many hospital administrators are running scared.
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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 - Surprise (Medical Bills)! Language, Framing and Your Bank Account - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Both state and national level politicians certainly know what side the bread is buttered on, and who’s doing the buttering. There are far more patients than there are physicians, thus the rush to fix the problem they’ve defined as “surprise medical bills.”
Sure, just like I’m surprised when I pay good money for admission to a baseball game and then find out that the beer isn’t free! What? It’s completely unfair!
By framing the issue from the position of the average voter, politicians think the solution to the problem that they’ve defined as “surprise” is to force physicians to take contracted rates that they never bargained for or, and why not, simply go to arbitration.
But wait, will you be “surprised” when you find out that arbitration isn’t free or even discounted? What do you mean, why isn’t it free? Will there be legislation to remedy the surprise arbitration cost problem? Don’t hold your breath.
Physicians can’t change the fact that most politicians are simply second handers who create nothing, but crave power. But at least physicians can make an attempt to define the language used in the out of network situation to gain traction in framing what the issue really is: Insurance companies refuse to contract at reasonable rates. Insurance companies want to cut out the cost of contracting and still force “contracted” rates down physician’s throats. By narrowly contacting, insurance companies can then put their fingers on the scale of what contacted rates in “the community” (supposedly) are.
But, of course, if insurance companies don’t have a contract with someone to accept a lower, contracted rate, why should they be entitled to any rate other than full rates? The one-sided “right” to impose a discount is, in essence, imposing a form of slavery on the non-contracted physicians: it’s taking value from you without paying you an agreed upon value in return.
Perhaps physicians are afraid to talk this way.
So how about this frame: Why should anyone be forced to accept a contracted rate they didn’t contract for? If insurance companies are interested in contracting they should reach out and do it. If they’re not, then either they or the patient should be responsible for the full fee. It’s as simple as that. Just like my ticket to the game doesn’t get me free beer unless I bought some sort of package deal.
If you simply sit back and leave it up to political power, then the situation will become what is attributed to Benjamin Franklin (I know, I know, he probably didn’t actually say it), “democracy is two wolves and a lamb sitting down to the vote on what to have for lunch.”
Unless you frame the issue, you will continue to be on the menu.
Hungry anyone?
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| | | | | Listen to the podcast here, or just keep reading for the transcript.
It's been almost 58 years since Martin Luther King, Jr.'s speech on August 28, 1963, in which he famously stated, "I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character. I have a dream today!”
When Rev. King used the term “dream,” he was not speaking of something past, something simply nocturnally ephemeral, but of an active belief, one that will be instantiated, one that will influence action and outcome.
Certainly, the discussions on this blog are at the business level, not that of the civil rights plane. However, even at that level, the business level, the notion of a dream, a belief, an intention, can and does drive action and change the future.
Some might argue that facts are facts and that mindset can’t change them. But what might play out in the uncertain future can’t yet be called facts and mindset drives action that can and does impact the to-become-facts as they unfold for you.
At a recent conference, an instant survey of physician attendants indicated that most believed their incomes will be lower 5 years out.
Will payers attempt to reduce physician reimbursement over the next 5 years? Yes, probably.
Will more physicians become hospital or large group employees over the intervening years and will those employers attempt to ratchet down their compensation? Yes, it’s possible.
But those outcomes are not certain and neither controls total income nor one’s own particular income.
The problem with believing that your own income will be down is that you’re telling yourself to accept it, and accept it you will.
Although thoughts alone won’t change a thing, thoughts influence actions and actions influence outcomes.
How would a baseball team play if the players believed they were going to lose? Poorly; why even try. Would the team play differently if the players knew they were going to win? You bet it would.
It’s your future. You can do what you want.
But if you ask me, why not believe not only that your income will be up 5 years from now, but that it will be up 10 times or more. Either way, believing you’ll be better off or worse off 5 years from now takes the same mental energy. But those beliefs will impact your choices and your actions.
And, as an added bonus, you can employ all those other docs who are setting themselves up to accept less.
It’ll be win-win. Everyone’s expectations will be met. |
| | | 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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| | | | 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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