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| Dear Friend,
In the late 1980s, President Ronald Reagan equipped that, “the nine most terrifying words in the English language are: I’m from the government, and I’m here to help.”
In the late 1970s there was a television detective show, Kojak, whose eponymous main character’s tag line was, “who loves ya, baby?”
And that’s the contrast between the November 1, 2022, announced 4.48% cut in reimbursement to physicians pursuant to Medicare’s 2023 physician fee schedule and President Biden’s announced plan in August 2022 to give civilian federal government workers up to an average 4.6% pay increase for 2023.
I often wonder what these people are thinking, or perhaps not thinking.
In his August announcement, Biden cited recruitment and retention challenges for federal positions as part of the reason for the proposed increases. But one could cut most of the federal government’s civilian employees and hardly anyone would notice. On the other hand, the aging population and their families will notice when physicians no longer accept Medicare.
Neither you nor I can know whether the government’s schizophrenia is part of a great plan to create a healthcare crisis that only “universal healthcare” will resolve, or whether it’s simply incompetence, although it’s probably safer, Occam’s razor style, to assume that they are idiots.
But the takeaway here is that it doesn’t make any difference what the reason is, because, other than through voting and lobbying, none of us, no matter our politics, have any real control over the government’s actions.
But you do have control over what you will do.
Depending upon your medical specialty, you have control over the ability to shift your practice’s business model away from government reimbursement and, in some cases, away from any, or any significant, dependence on third party payors.
And, in other specialties where facility contracts make that impossible, you have control over business strategy such that you can put yourself in a far better position to obtain stipend support.
But in any event, you can’t wait for the government to help you out, because that help is most likely not coming. They are from the government and they’re not here to help.
Ask yourself “who loves ya, baby?” and show some love for your own future.
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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.] |
| | 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 - A Refresher On Price Versus Value - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished 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.
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| | | Listen to the podcast here, or just keep reading for the transcript.
Why is it that some group leaders believe that simply having data on what their competitors might offer in terms of exclusive contract stipends, depth of coverage, and the like weighs heavily on their group's own future?
This is incredibly limiting thinking.
Consider the example of car manufacturers. Certainly, there are commodity manufacturers, such as Chrysler. Those manufacturers are indeed concerned with their competitors' pricing and features. Taken together, those manufacturers spend billions trying to convince you that a Dodge Ram is better than Chevy Silverado, and vice versa.
But then there are manufacturers like Lamborghini and Ferrari. They are competitors in an entirely different sense. Each produces cars aimed at a different segment of a very particular market. But even then, Lamborghini makes cars and chases buyers, while Ferrari won't even make a car to ship to a dealer unless that dealer already has it sold.
On even a basic level, knowing exactly what your competitors have accepted as stipend support at other facilities doesn't provide any truly useful information in respect of what the stipend should be at your facility. Averages are even more useless.
n a deeper level, believing that what your competitors might offer somehow controls your decision as to what you're going to offer allows your competitors to tell you how to run your business. Why not make it simple and just call them up and ask them what kind of response to the RFP you should submit?
The key is to turn the tables on the creeping commoditization of your specialty before you get to the RFP. Sell Ferraris, not Chevys. And if the hospital only wants to buy Chevys then you're practicing at the wrong location. But that's another story.
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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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