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| Dear Friend,
What are the odds of your medical group's long term survival?
My dog stood, body frozen stiff, yet ready to lunge. His eyes fixed on the only object in his world, the squirrel eating seeds off the ground 14 feet away.
The squirrel matched the stare, glanced at the tree about four feet distant and then, continuing to eat the entire time, turned his back as if he were the only one who would be doing any eating that day.
Many medical groups do the equivalent turn of the back in regard to the risks within their business environment.
In a complex system, there are who-knows-how-many unseen risks. But there are many significant, obvious risks as well, risks that may be acknowledged intellectually but ignored as unimportant either because the observer is lying to himself or is unprepared to deal with them.
Group governance issues, merger integration messes, compensation plans that incentivize for the wrong behavior in a patient-satisfaction-and-value-based-care-world, and the lack of any cohesive plan to retain, let alone develop new, business, are just a few of the gnawing issues relegated to neglect in favor of billing another unit. But as in other problems of induction, at some point, past results don’t have predictive value and your group is someone else’s lunch.
That day, the squirrel’s bet was a good one. My dog’s never caught one. But maybe one day he will. For the squirrel it will be low odds times high potential damage (death) equals high risk, ignored.
But it’s not that the risk wasn’t there every time. It was; it’s just that the odds came out in the squirrel’s favor that day. For the squirrel in the yard, the odds of being eaten had come out in his favor his entire life.
Medical groups that have had successful 20 year or 30 year or even longer runs have benefited from a similar run of the dice. So far.
Let’s talk now before the run of the dice turns on you.
Years ago, I had another dog, Showlow. I had the task of removing squirrel parts from the back yard on a regular basis, even once having to tell her to drop the head as if we were playing the Addams Family version of fetch.
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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 version:
I want to talk with you today about a concept that I call “platform analysis.”
As you’re probably familiar, the word “platform” has several meanings in English, but they all relate to the concept of holding something up, something that supports you.
Platforms can be political platforms. They can be platforms from which people dive into a swimming pool. And, there are also platforms in the sense that your business is attached to them. For example, a platform like Google on which internet marketers have hitched their businesses.
In fact, several years ago there was an event that internet marketers referred to as the “Google slap.” Google changed their search algorithm, and all of a sudden those long-form sales letter sites that were selling who knows what, weight-loss supplements and muscle-building stuff, were no longer appearing high in search results. It significantly impacted – in fact, probably destroyed – many online marketers’ businesses.
We see that same kind of concept in the news today in terms of, well, YouTube or Twitter “de-platforming” someone because of their political views.
We also see it today in other news stories. Take the story of American Airlines and Southwest Airlines, both of which invested heavily in the Boeing 737 Max only to find out that that "platform" has some significant issues, leading to the grounding of their fleets.
So what does it have to do with you?
Well, whether you’re the leader of a hospital-based group, an office-based group, or someone who runs a healthcare facility, say an ambulatory surgery center or a chain of imaging facilities, you may be dependent upon a platform: It could be a platform such as a hospital with which you have a contract. It could be a system-wide exclusive contract for imaging. It could be the platform of being on the provider network of a certain large payor that’s significant in your market.
You’re subject, just as were those guys who were marketing through Google or those folks who were de-platformed by Twitter, to the same sort of de-platforming: A hospital-contracted group can lose its contract, mooting its existence. A facility or a medical group that's dependent on being in-network can be devastated by being tossed out by the payor.
Have you analyzed your risk of being de-platformed?
What steps have you taken to reduce or minimize the impact of being de-platformed?
You must seriously question how dependent you are on any one such platform relationship.
If you’re like most medical group leaders, you have dreams of a bigger and better and larger future for yourself and for your group.
But if you’ve given the authority to someone else to moot your existence, to de-platform you, whether you’ve done it on purpose by saying you’re dedicated to only one system or facility, or whether you’ve done it by accident because you haven’t spread the business out as wide as you could, then you’re giving someone else permission to turn your dreams of a bigger and better future into a nightmare.
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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 - Creating Interlocking Physician-Owned Ventures - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Driving through the mountain town built around a lake, I couldn’t help but notice the David Isaac empire. (David Isaac isn’t his real name, I’ve changed it for this post.)
There was David Isaac Boat Sales. A mile or so away, there was the David Isaac Marina. And, there was David Isaac Toyota. A quick Google search reveals that he has similar car and boat businesses in other towns, too.
Mr. Isaac built a web of interlocking “motorized” businesses, each of which could stand alone, and each of which, some more than others, serves to drive customers to other elements of his ventures.
Over the past decade, much of the web building in healthcare has involved hospitals creating “systems.” Hospitals purchased physician practices, employed and otherwise aligned physicians, and pushed into outpatient care.
But now, with an increasing number of procedures capable of being performed in free-standing facilities, from urgent care to emergency medicine, to free-standing surgical facilities ranging from interventional radiology ASCs to orthopedic surgery ASCs, to, well, almost, you-name-it ASCs, physicians have an increasing opportunity to create their own interlocking webs around the central themes of healthcare and wellness.
It’s true that there’s significantly more regulation of healthcare investments by physicians than there are regulations throttling David Isaac’s motorized empire. But Stark, the federal Anti-Kickback Statute, their state law counterparts and so on are just details. Important details, yes, but not roadblocks to creating you own business structure larger than a single physician practice.
Mr. Isaac could have stopped with his single boat sales lot on Main Street. He didn’t.
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| | | Listen to the podcast here, or just keep reading for the transcript.
Although infection rates (which may be meaningless) and Covid-19 related hospital censuses (which are highly relevant) vary throughout the country, two things are for certain.
First, there remains, and will likely remain for the next year or longer, despite the talk about vaccines, a very high likelihood of additional "nonessential" case shutdowns. Take, for example, the decision last week by New Mexico's governor to place a new "temporary" ban on elective surgeries.
Second, unless you're lucky enough to find a buyer with a short-term memory problem (or one run by 30-something MBAs focusing on "getting deals done" to collect this year’s bonus), the value of most healthcare businesses is in the range of 50% less than it was a year ago. For some, that's a low estimate of the drop in value.
And, here’s a third point for your long range consideration. That's the fact that governors have become so emboldened to exercise dictatorial power, and the public has been so meek in bending to it, that future shutdowns for other “epidemics,” however defined, are likely. Bad flu season. Shut them down. You think I'm kidding. I'm not. Just wait and see.
So what’s the takeaway for you? Well, depending on just who you are, it means that unless you have developed a unicorn type practice or healthcare business, you need to adjust to the new reality. You need to find ways of making your business far more profitable, far more malleable, and far more resilient, finding every edge in order to (i) pull out current cash so you are not dependent upon a later, large purchase price that might never come; and, (ii) depending on how your business is structured (such as an ASC), to increase EBITDA in order claw your way back up to an acceptable, even if low, valuation. |
| | | 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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