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| Dear Friend,
Babylon Health's AI isn't babbling on.
The future was almost here. Flying cars buzzing overhead. Colonies on the moon. And Babylon Health, the industry’s leading AI-driven digital-first primary care service, managing population health at scale.
What, no flying cars? No colonies on the moon? And Babylon Health’s U.S. subsidiaries, Babylon Health, Inc. and Babylon, Inc. formed to operate an integrated primary care model combining remote patient monitoring and app-based AI diagnosis, both filed for Chapter 7 bankruptcy, each leaving creditors with estimated debts of from $100 million to $500 million and no funds projected to be available for distribution to unsecured creditors.
Prior to the bankruptcy filings, Babylon Health sought a merger partner. And then, when the merger evaporated, it attempted, to no avail, to find alternate financing.
Founded in 2013, Babylon’s parent entity, Babylon Holdings Limited, went public via a SPAC in 2021, with a pro forma valuation of $4.2 billion – shortly after its IPO, shares hitting a high of $272.50. Fierce Healthcare, an online publication, reported that, in January 2023, Babylon’s founder and CEO, Ali Parsadoust (AKA Ali Parsa), said that the company’s story and stock were “misunderstood”. As of the close of market on August 18th, shares were trading at just 3 cents.
Some actionable lessons for you:
- AI, like flying cars, offers an amazing future. But like flying cars, the question is when.
- AI is a tool to be leveraged carefully, not a substitute for an operational business, not a substitute for valuation based on actual profit, and not a substitute for real, live, physician-provided medical advice.
- Investing alongside the “smartest people in the room” in something thought to be even smarter, often isn’t very smart, certainly at IPO level valuation.
- Reality is a bitch, even if it’s misunderstood.
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| | | | | Tuesday - The Power of the Thank You Note - Success in Motion
Watch the video here, or just keep reading below for a slightly polished transcript:
I was thinking today about the value of a thank you, particularly the value of a thank you note.
I know it may well be the case that you see dozens or several score of patients per day and that you’re busy. But that’s no excuse for not doing what I’m going to suggest.
Have you thought about the value of a thank you note in terms of patient satisfaction and retention?
I’m talking about a real note, not an email. I’m talking about a note written by hand, not by a computer, and one that’s signed by you, not by someone faking your signature, because sooner or later, there will be a comparison signature and someone is going to realize that they’ve been played.
I know nobody does it. That’s why I want you to do it. I want you to stand out and show your patients that you care about them. Even if you’re a hospital-based physician and you’re never going to see them again.
Think about the value it creates for your practice in terms of how your patients are going to think about you. Or how they’ll refer someone to you.
There’s tremendous value in this — tremendous good will.
I haven’t tested it yet but there might even be a link to how quickly co-pays are paid.
I do know that everyone loves to be told "thank you," so why don’t you start telling them?
Thanks for reading this; I appreciate it!
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| | Wednesday - Preserving the Past - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Tension, lots of tension about what to do, but that doesn't mean that always doing nothing is the right response.
It's certainly true that knowing what not to do, from individual actions to projects that could be pursued but which are passed on, is as important as taking affirmative action on those projects that will be pursued. At the same time, however, this is a very different concept from devoting close to all of your attention on preserving your current position which, really is equivalent to preserving the past.
Physician groups are under tremendous pressure, the bull's-eye of the target toward which the arrows of ACOs, hospital-centric healthcare, physician employment, the Affordable Care Act, national group competition, and more, are aimed.
What's needed is for group leaders to devote significant time to how they're going to transform their businesses to not only evade those attacks, but to capture new ground themselves.
I'm not suggesting that groups abandon their present relationships – certainly, you need to hedge more speculative ventures with a strong base. But query how strong that base really is.
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| | | Listen to the podcast here, or just keep reading for the transcript.
We’ll take your $15 billion stipend, but as to those strings you put on it, “F*^%” you”.
No, it’s not a perfect analogy to medical group–hospital negotiations, but, well, it’s close enough for government work.
TSMC, the world’s largest contract microchip maker, is balking at up to a $15 billion government stipend in connection with its construction of two new chip factories in Arizona in which TSMC will invest $40 billion.
The problem isn’t the $15 billion, it’s that the government has put some strings it, such as “tell us how you are spending it” or “if you make more than $X, give us some of the money back”.
As an aside, how you or I conceive of the wisdom of, to put the nicest moniker on it, “public --private partnerships”, is beside the point.
What is almost directly on point is how TSMC, which I doubt even needs the money, is playing its cards. Essentially, they are saying, “we know that you need us more than we need you, so we’ll just take the money, no strings attached.”
It’s true that there are distinctions between one time negotiations, what I call Transactional Contracts™, say for the purchase of some real property, and Relationship Contracts™, the negotiation of a hoped-for many decades long relationship between your medical group and some facility. But it’s not clear that TSMC’s dealings with the government aren’t hoped by both parties to be of the Relationship variety because far more than two new chip factories are needed.
Some consultants think that it pays to be reasonable when making a first offer. Those with an understanding of human nature don’t think that that advice is very, well, reasonable.
Of course, being “unreasonable” from the hardball perspective and being “unreasonable” from the perspective of wanting to be liked are two wildly different things. Note that using legal counsel wisely in negotiations allows you to maintain your need to be liked while still pushing the envelope. “It’s Weiss’s fault that we asked for $15 billion. Had we known, we’d have come in at $12 billion.” Either way, try being a bit more unreasonable.
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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
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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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