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| Dear Friend,
What are you trying to achieve?
That's the subject of this Monday's blog post, I Can't Wait to Become a Partner. You can follow the link to read the post online, or just keep reading for the rest of the story.
“I want to become a partner.”
Lawyers hear this all the time from newer members of their firm. Doctors, too, hear it from junior members of their medical group.
Partnership is, it appears, the Holy Grail that, once grasped, results in eternal professional success. Maybe.
But what does partnership really mean?
People focus on the upside, or, actually, the imagined upside. More money. Well, maybe. More status. Well, perhaps.
They rarely stop to wonder what that upside might actually be. Instead, it’s an amorphously imagined more money and more status. Maybe that’s right, but maybe it’s not.
But they rarely, if ever, focus on the downside: the liability and the responsibility that comes with ownership. More risk? What?!?
I once a partner in a firm whose senior partner told me that it would be cheaper to make Bob, not his real name, a partner because we could then pay him less.
That comment triggers at least two thoughts: First, there may be tremendous problems in a professional practice if it cannot distribute a greater reward to its owners than to its employees. And second, “partnership” in some instances might be some type of, well, scam.
Be careful about what you wish. Check out exactly what you’re getting into. Take off those rose colored glasses.
Those holding the keys to your “success” might be all too willing to hand them over to you.
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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:
It appears that many believe that we are already at some sort of "new normal." They think that we're there, wherever that might be. You know, the fact that in some states we still see the cloth or blue bandana mask in the market, the line to get into Costco, the fact that only the patient can come into the surgery center, no family members allowed.
I don't think that we're anywhere close to being at the new normal. I fully expect that there will be continuing waves of shutdowns, whether or not for Covid.
Look at how governors become emboldened in terms of shutting down major portions of the economy. Take, for example, the governor of New York or the governor of California, one who resigned and the other who narrowly escaped a recall.
I strongly think that what we're going to see in the future is management by politicians who believe that business can be turned off and instantly restarted; that the economy works like a light switch. It just isn’t so. Anybody who's been in business knows that.
What should medical group leaders do? What should facility leaders do?
Begin with designing a flexible staffing program.
You are going to have to seriously address the issue of how you are going to lay off and who gets laid off. You are going to have to look at revising services agreements that promise people an “equal share of the work” when there be may not be enough work to go around.
You are going to have to prepare for paying rent when there is no income. Be prepared soon to renegotiate leases to address the fact that there will be reoccurring events where there is no income and for which there should be forbearance.
That, my friends, is the "new normal".
Bad flu season: Shut them down!
Kids with measles: Shut them down!
Most of you (well some of you) might not like to hear this, and maybe I’m wrong. But while you can hope for the best, you should understand that the worst might occur. Taking that into consideration is the smartest move.
This coming new normal is already impacting the value of your business. For example, right now, unless you are strategically postured in a way that makes you a
unicorn, and frankly there aren't that many unicorns, the value of your facility or professional practice has likely been impacted negatively as a continuing result of Covid on averaged EBITDA and as a consequence of flooding the economy with Covid dollars.
As a result, you need to adjust expectations among owners concerning distributions, concerning valuations, and concerning getting out, at least as to a majority interest, before valuations dip further, which they will.
Yes, hope that everything is going to work out fine. But plan for the worst possible case. Do your structuring. Do the psychological work with your partners and with your staff so that they're prepared if it doesn't turn out all rainbows and unicorns.
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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 - FMV Is No More Anti-Kickback Compliance Than Ground Pepper Is Pot Roast - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
A recent U.S. District Court ruling serves as a reminder that more than fair market value is needed to remove an arrangement from scrutiny under the federal Anti-Kickback Statute (“AKS”).
For example, I might pay you fair market value for providing consulting services in regard to my medical device, the “UpcodeExtractor 2.0” —but what if I engage your services as a reward for implanting the device? Or, what if the number of consulting days (paid for to the penny at the amount per day or even per minute opined to by 23 of the nation’s most recognized valuation experts) correlates to the volume of your use of UpcodeExtractor 2.0s? Then we’ve got a problem.
In February 2022, the Court in U.S. ex rel. Dr. Kuo Chao v. Medtronic PLC, et al., issued an order denying the defendants’ motion to dismiss. The case is a False Claims Act lawsuit brought by whistleblower/relator Dr. Kuo Chao, who alleges, among other things, that the defendants, collectively referred to as “Medtronic”, engaged in a multifaceted kickback scheme to compensate doctors for ordering a greater number of Medtronic “Pipeline” devices, an implantable device used to treat brain aneurysms.
The whistleblower alleged, among other things, that Medtronic maintains a proctoring program through with it regularly pays doctors for professional services. Those doctors were experienced in implanting Pipeline devices and, as paid proctors, they taught other doctors how to do the Pipeline procedure. Dr. Chao’s allegation is that Medtronic systematically and habitually overpays the proctors for their proctoring services as a disguised kickback meant to incentivize them to order more Pipeline devices for their own cases. Other alleged circumstances include other alleged overpayments for similar purposes.
The defendants argued that Dr. Chao did not specifically allege that the payments exceeded FMV and moved for a dismissal.
The Court’s response in its order denying the motion to dismiss was that, as has been established by case law, the payor of remuneration violates the AKS whenever one purpose of the remuneration was to induce future referrals or orders, even if the payments were also intended to compensate for professional services. The court also stated that even some fair market value payments will qualify as illegal kickbacks, such as when the payor has considered the volume of reimbursable business between the parties in providing compensation and otherwise intends for the compensation to function as an inducement for more business. It also stated, citing previous case law, that “neither a legitimate business purpose for the arrangement, nor a fair market value payment will legitimize a payment if there is also an illegal purpose (i.e., inducing Federal health care program business).”
Some takeaways for you: - Fair market value is an “ingredient” in AKS compliance. It’s not the whole meal.
- Even if FMV is present, the analysis isn’t over by a long shot.
- The underlying scheme, not the ink on the paper, governs legality versus illegality.
- Every new, and every existing, financial relationship with anyone or any entity with which physicians and other healthcare providers do business must be vetted or re-vetted in light of enforcement reality. Immediately.
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| | | Listen to the podcast here, or just keep reading for the transcript.
The Wall Street Journal reported that Japan's 100 year old Sharp Corp. announced that it had doubts that it could remain as a going concern.
Sharp had invested heavily in building liquid crystal display manufacturing plants in order to compete with its South Korean rivals, only to have the market collapse.
Sharp's president was quoted as saying, "We lacked a sense of speed. The situation could have been different if we took steps more quickly."
That sense of speed and action is entirely consistent with the philosophy of Col. John Boyd, considered by many to be the greatest military strategist since Sun Tzu, and his OODA loop, OODA being Observe, Orient, Decide, and Act.
Boyd's concept is that strategic advantage is gained by being able to process information and take action faster than one's opponent. This is referred to as getting inside your opponent's OODA loop.
Whether or not Sharp ever heard of the OODA loop, it's abundantly clear that someone got inside of theirs.
There are two important lessons here for medical groups.
The first: A 100-year-old company, or an office-based practice that has always received referrals from a certain group of internists, or a hospital-based group that has held the exclusive contract for 50 years, are not necessarily guaranteed a satisfactory future.
The second: Strategy and tactics exist. You either use them to your benefit or someone else uses them on you. |
| | | 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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