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| Dear Friend,
Create a monopoly.
During junior high school summers, my friend Steve Cunningham and I would ride our bikes across the San Fernando Valley to buy a root beer (and sometimes a chili cheese burger) at The Munch Box. The root beer was ice cold. The burger hot, its cheese melty. It was a special blend of distant, delicious, almost forbidden fruit.
I’ve often recommended that groups provide an Experience Monopoly™ to their customers: an experience for patients, referral sources and facilities that they cannot get from anyone else.
But simply providing an experience isn’t enough. At its core, a successful exchange involves delivering value as well.
That’s far more complex than it initially appears.
Equal value doesn’t cut it. The key is delivering more value than the recipient parts with in return.
The scales balance, but not from some objective point of view, only from a subjective one: from the recipient’s perspective.
And strangely, the balance isn’t perfectly even. From the recipient’s point of view, it’s always tipped in his favor. (But just as magically, the party delivering the value sees an increase in his value as well.)
A dollar for a dollar’s worth of value is common, but it will never delight, it will never draw the customer back to you, it will never bind the customer to you.
In creating an Experience Monopoly™ and in delivering value, the key is to metaphorically deliver two dollars for every dollar received. Even better, it’s to create a situation in which the recipient interprets the relationship as receiving the two dollars up front, so to speak, even before he or she parts with one.
In an Experience Monopoly™ there’s an element of the fear of loss: The customer knows that he or she can’t receive the same value from another source. That’s extremely important. But there’s something else at play, too, something more than fear: That’s the pleasure of gain. If I can get two dollars of perceived value from you for every dollar I give you, I’d take my fill every day.
Of course, this begs the question of how you demonstrate value. But’s that’s another story.
Think of the value Steve and I found at The Munch Box: We rode our bikes a bit more than 9 miles through the 100-plus degree heat and then paid the price in dollars for the root beer and cheeseburger. And we did it time and again.
And even with dozens of fast food places a few minutes away, The Munch Box is still there. Get the idea?
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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:
Why would anyone want to invite the OIG into their facility to poke around?
Believe me, this isn’t my idea, but I read a short interview with someone, a physician, in a national healthcare publication who was talking about the need for all surgery centers to adopt electronic health records.
It's certainly a great idea to adopt systems for electronic billing of patients and for electronic health records. In other words, not paper systems. As the physician being interviewed correctly pointed out, these systems help streamline surgery centers. Physician owners should be all in favor of this, clamoring to do this – about all of which I agree.
But then he went further.
He said that eventually the federal government – that is Medicare, should be able to tap into an ASC's electronic records to help reduce the burden of compliance!
What?!
You think the government is going to reduce the burden of compliance by getting into your electronic health records, and into your billing system? Do you think the IRS would reduce the burden of compliance if they got into your accounting system?
Sometimes smart people say the stupidest things.
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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 - What Do Physician Groups and Vending Machines Have in Common? - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Some physician groups operate like vending machines.
Instead of Cokes or 7-Ups, efforts are placed into the machine and are dispensed to patients.
Payments go into the slot but are regularly emptied out. Cash is seldom allowed to remain undistributed.
During the right time and under the right circumstances, there's nothing wrong with having a practice that operates like that. In fact, in some situations, it's the dream set up.
But in other situations the focus on current distribution of cash becomes addictive and destructive, like the other kind of coke.
For many groups, this is one of those times. Changes in healthcare are drastically affecting their operations. If a group is to do anything other than remain totally reactive to change, to let change happen to it, to be a victim of change, the group needs to be able to invest in its future. It needs to seek out opportunity and restructure as needed to capture it.
But it can't do that if there's no cash to fund it. Pulling cash back in from the partners or shareholders is always more difficult than not distributing some of it in the first place.
Don't shortchange your future. |
| | | Listen to the podcast here, or just keep reading for the transcript.
Price is what you pay. Value is what you get.
If value, to you, exceeds the price you pay, you got a good deal.
For the seller in that same transaction, if value (the price you, the buyer, paid) exceeds the seller’s price (what it cost the seller to provide the item or service), the seller got a good deal, too.
Both the buyer and the seller are better off. Magic!
So, what’s the practical application of this for you?
In order to capture more business, you either have to reduce your price (not my favorite) or increase the value you provide (my favorite).
Unless you’re selling a true, physical commodity, staplers or stethoscopes, for example, in which mass production leads to lower per-unit cost, competing on the basis of price is a fool’s game. Your competitor will simply lower its price by a few cents, a few dollars or a few thousand dollars, depending on the scale, and the downward spiral begins.
Instead, focus on how to increase the value you provide. While price is easy to see (Botox treatment, this week only, $199!) value is far more slippery, amorphous, individual, and particular. Heck, you’ve probably seen my picture on the videos on my website but there’s no way I’m going to buy Botox even if it were $99. A Ferrari, though, that’s another issue. “But why, when a Toyota would do?”, some might ask. Well, that’s what makes price and value interesting.
Accordingly, price and value can be used to attract and they can be used to repel. Repel? Absolutely! The plastic surgeon whose fee for some procedure is $4X is not competing with the plastic surgeon down the block whose price is $X. The value message sent by the low price attracts some, even many, but it repels those who evaluate value differently. Our first plastic surgeon doesn’t want those folks coming in the door. The second one welcomes them in.
If you’re running your own practice or business, or if you’re the leader of a group, you can use these principles multiple ways.
Although many believe that healthcare pricing, at least on the payor side, is relatively fixed, it’s not. Some providers and some facilities have created value, or the perception of value which is really the same thing (all value is perceptual), which leads to increased levels of reimbursement.
In the hospital-based world, some groups have lost contracts to groups which competed on the basis of lower or no stipend support, while other groups have maintained, or increased, the value proposition such that the hospital sees far lesser value in a competitor’s “free”.
And, for all groups, the value proposition, from prestige to the so-called “soft” factors such as group culture, can trump compensation in attracting sterling recruits.
To Oscar Wilde, a cynic was someone who knew the price of everything but the value of nothing. So don’t be a cynic: understand both price and value and how they are inextricably linked. |
| | | 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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