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| Dear Friend,
What's the actual term of your contract?
What’s the difference between a three-year agreement and a 23 year agreement? And yes, it’s a trick question.
The answer is, “none”, if the agreement is like many or even most in connection with services deals. That’s because the real term of the agreement isn’t its so-called “term”, it’s something else. In fact, very often, the real term of the agreement is contained in a separate, and sometimes distant in terms of section numbering, provision. What I’m referring to is a provision that allows one or both parties to terminate the arrangement without cause.
As a result, the true term of a three-year agreement with a 60 day without cause termination provision is exactly the same as the term of a 23 year agreement with a 60 day without cause termination provision: a rolling 60 days.
Of course, “without cause” cuts both ways. One is that you want out of the contract early, so you exercise your without cause rights. But the other is that your contracting partner wants you out of the deal and they want you out quickly, or at least as quickly as the without cause notice provision, 60 days in our example. You can brag all you want to your partners that you pulled one over on the hospital CEO when you talked her into that 35-year exclusive contract. Just don’t mention the 60 days without cause termination provision, because that’s the true term of the deal.
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| | | | Wednesday - The Ghost of Physicians' Christmas Future - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Money. Power. Status. Popularity. The four human interest motivators.
What does this mean for physicians in the context of a hospital-centric healthcare future?
The hospital will control the money, but due to the need to use fair market valuation studies as backup for compliance purposes, which will lead to a spiraling down of physician compensation, sooner or later doctors' incomes will be as predictable as government employee classifications.
Power will be tempered by cookie-cutter reliance on so-called best practices and by strictly enforced treatment pathways.
Status will decline with income and with the fact that physicians will cease to be the only "doctors" among the plethora of degree-laden providers.
And, popularity will wane as physicians become back room technologists once or twice removed from most direct patient care which will be delivered by advanced practice nurses and other paraprofessionals.
You might think that Charles Dickens has come back to write some new lines for the ghost of Christmas future, but alas, unless physicians act to move the healthcare solar system's center back onto them and away from hospitals, this future is inevitable.
So you see, this isn't Dickens' story: A Christmas Carol had a happy ending – this may turn out to be a tragedy.
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| | | Listen to the podcast here, or just keep reading for the transcript.
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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| | Help Us Help You With Helpful Content
What tailored content would you most like to see during this
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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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