Subject: Practice Success

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May 19, 2023
Dear Friend,

Inflation.  

That's the subject of this Monday's blog post, What “A Hamburger Today is Worth Less on Tuesday” Says About Managed Care Negotiation. You can follow the link to read the post online, or just keep reading for the rest of the story.

Wimpy, the character from the Popeye cartoon series (not just a hungry guy, but a talented economist), famously said, “I’ll gladly pay you Tuesday for a hamburger today.”

Put enough Tuesdays between today’s hamburger, or, for you, units of service, and the time of payment, and we have lessons on the time value of money, and (today’s message for an inflationary period), and on the fact that as time passes, dollars are worth less.

Over the decades during which interest rates were near zero, most of us lost track of the impact of the ravages of inflation on negotiated managed care rates. To the extent that compensation demands and other operating costs increased, there was always renegotiation three or so years down the road when the current contract expired, a rule that I am sorry to say many blew off . . . they never renegotiated. Instead, asleep at the switch, they allowed contracts to roll over unchallenged or, worse, signed agreements without even looking at the rates, which often were going in the wrong direction.

But that’s not you. Two or so years ago, you certainly began building automatic cost of living increases into your agreements with payors. [But if this is not you, then change your strategy today.]

But for what index did you negotiate? Someone out there just shouted, “well, the CPI, of course!” Maybe so, but the overall CPI for all urban consumers or some geographic subset (e.g., the Consumer Price Index for All Urban Consumers (CPI-U), Washington-Arlington-Alexandria), or perhaps some product specific subset (e.g. the housing component of that same CPI index)?

But why use a CPI model at all? Is it indicative of the price sensitivity of the inputs impacting your practice? Must the index be so indicative? Might another index, even one from a different domain (e.g., the PPI or the PMI) or even the year on year increases in Blue Cross of Wherever State’s premium?

Of course, all of this requires thinking, and time, effort, and, yes, money. That’s why everyone else, but not you, have avoided negotiating indexed increases into your managed care contracts, right?

Reach out to discuss your situation.

Tuesday - $580 Million in Medicare Overpayments. No Jail Time, No Repayment. - Success in Motion

Watch the video here, or just keep reading below for a slightly polished transcript:

A doctor makes a mistake of trust: his or her office manager runs a little scam on the side, bills a federal healthcare program an extra $100 here and an extra $100 there. Then the shit hits the fan and who’s in trouble? Well, the doctor is.

But what if $580 million is missing due to professional incompetence and the failure to supervise?

Well, I guess it all depends on who lost the money.

An OIG report released on May 5, 2023, reveals that CMS itself overpaid psychotherapy claims during the covid pandemic (which I think officially just ended a few days ago because hey, well, sometimes the government moves slowly). They overpaid these claims due to what the OIG found were basically improper procedures and faulty work.

Will anyone in the government have to pay back a penny? Well, no.

Will anyone have to do some jail time? No.

But that doesn’t mean that if you upcode by mistake and it results in a $500 overpayment, that you’re going to be so lucky.

Some of you have to be careful out there.

Others of you, well you just work for the government.

Wednesday - Are Limiting Beliefs Destroying Your Career? - Medical Group Minute

Watch the video here, or just keep reading below for a slightly polished transcript:

I noticed an acquaintance, “Dr. X,” driving out of the upscale shopping center near my house. I waived hello, but wasn't sure if X had seen me.

Later, X apologized for not having recognized me that day. He said that he’s uncomfortable when he goes to that shopping area and is so highly focused on leaving, that he doesn't really notice what’s going on as he drives out.

I asked what made him uncomfortable about the shopping area. The response: “The ‘rich people,’ you know, like plastic surgeons.”

Confused and curious, I asked X what it was about the people at the shopping area that bothered him. The response: “They’re just so stuffy and pretentious.”

Although it is true that the shopping area parking lot sometimes looks like a Rolls-Royce and Aston Martin dealership, my experience with the people there is that they are as friendly or friendlier than the norm in the greater surrounding community: they generally appear happy, are smiling, and readily initiate or return a greeting.

So what is it about “rich people” that really bothered X?

X appears to have a moderately busy practice, but he is definitely not in the “rat race.” Previously, I thought that that was a choice, but perhaps the conversation revealed something else, that he does not want to become more successful because he will become like those “rich people” whom he clearly dislikes.

I've noticed a similar phenomenon many times in the course of dealing with clients in their business relationships. Oftentimes, individuals and groups seem to be putting on the brakes, not pushing on the accelerator, out of some mistaken belief that they occupy some fixed rung, as in a caste system, outside of which they are not permitted to tread.

The concept of accepted beliefs, in this case, of limiting beliefs, has been described as a mimeme, or “meme” for short. Just as X might be holding himself back because he doesn't want to become like those “rich people” whom he believes are stuffy and pretentious, many internists believe that they are somehow “less than” the hospital administrator who tells then that the hospital-employed hospitalist will be seeing all of the internists’ in-patients. And, on a greater level, many physicians today are willing to fall lockstep into line with hospital-centric notions of healthcare.

Have you bought into these, or other, limiting beliefs, and are they holding you or your group back in your career and business success?
Listen to the podcast here, or just keep reading for the transcript.

Psychologists and direct marketing experts (who really are applied psychologists) tell us that the fear of loss is a greater motivator of human behavior than is the prospect of gain.

Are you applying fear as a tactic in connection with your relationship with hospitals and other entities with which you have a Relationship Contract in place?

As you’ll recall if you’re a regular reader, a Relationship Contract is an agreement that, as of the closing, creates an ongoing relationship between the parties. Its opposite is a Transactional Contract™, a deal that once it “closes,” the parties go their separate ways – think of the purchase of a home.

Note that when I talk of “fear,” I’m not addressing the use of threats. Instead, I’m speaking of fear of loss as an underlying current to a broader publicity push in favor of your group – a part of laying the groundwork for contract renewal.

In the context of your group’s relationship with, for example, a hospital pursuant to an exclusive contract, the fear that can be harnessed includes the fear that your group will no longer desire to provide services at that facility, and the fear that you will pull back the added value services which you delivered over and above any contractual obligation in the course of your creation of an Experience Monopoly.

When deploying fear based tactics, it’s important that you focus on an already existing fear, one that hospital administration is empowered to act upon, and one that is relatively soon to occur or to be avoided. But on the other hand, the fear can’t be one that causes the hospital administrator to freeze like a deer in headlights – he or she will be too paralyzed to take constructive action.

Last, fear alone isn’t enough to spur positive action in your group’s favor: You also have to drive home, hard, the fact that your group offers the complete solution to allaying those fears.
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.


Get your free copy here.
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Books and Publications
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.
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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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

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