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| Dear Friend,
Will you become obsolete?
That's the subject of Monday's blog post, Overexposed: A Kodak Moment. You can follow the link to read the post online, or just keep reading.
I remember, as a kid, walking around Disneyland, noticing yellow “no parking” size signs labeled Kodak Moment. They indicated a great vantage point for taking a photo.
When Kodak was challenged by Fuji for dominance in the sale of photographic film, Kodak succeeded by changing the value proposition. They were no longer in the photo business, they were in the memory business. And who better to protect your memories, the cheaper alternative, Fuji, or the company synonymous with photography, Kodak? The answer was obvious.
But by 2012, Kodak was in bankruptcy, its core film business gutted by the digital camera.
What’s darkly funny about this is that Kodak invented digital photography, yet chose largely to ignore it. Perhaps Kodak was too large to truly innovate. Perhaps it was too focused on film to make the switch to digital. Perhaps its employees, from executives to those working in its manufacturing plants, were economically handcuffed to film photography.
The same phenomenon is common in healthcare.
Many medical groups, especially hospital-based medical groups, choose, sometimes intentionally and sometimes simply by default, to ignore the fact that unless they establish an identity separate and apart from hospitals, their businesses will soon be obsolete.
Of course, their medical specialty will likely continue – but it will be controlled by someone else, whether by hospitals or by other groups which disrupt their business relationships.
Start taking action now to avoid having your own Kodak Moment.
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| | | | | Tuesday - But What Price Does The Seller Pay? - Success in Motion
Watch the video here, or just keep reading below for a slightly polished transcript:
I want to talk to you today about a concept that maybe you’ve never thought about.
Let’s picture a deal, the sale of a controlling interest in an ASC, for example. Everyone who owns an interest in a surgery center is familiar with the concept of the price that you would receive were you to sell all or a part of your interest.
What about the price that you might pay, as the seller, in a deal?
What am I talking about? It's the buyers who pay the price – the seller collects the price!
Well, that’s a shorthanded way of looking at it. In any deal, the deal is more than simply about money. It's about other aspects of the deal as well.
For example, today, I read a story in The Wall Street Journal about farmers who normally sell grain to a local grain elevator. Traditionally, that’s how farmers would sell their crop.
Then a couple of years ago, someone came along with their great, high-tech thinking, and decided to create an online marketplace in which farmers can sell their grain to the highest bidder, not only to the local buyers.
However, for all the great-sounding talk, there were lots of problems. For example, trucks didn’t come to pick up the grain as scheduled. When trucks finally did come, it would be in the middle of the night. When it came time to pay for the grain, they were weeks, if not months late – as opposed to within hours of delivery. The price the farmers paid was a bad and extremely troubling deal.
The same thing applies in connection with the sale of, in our example, an ASC. Not every buyer is going to be a good buyer which fosters the development of the center. Some are going to choke the ASC to death by cutting expenses to the bone.
In every deal, there's more than simply the money that changes hands; there's the price you’ll pay one way or the other for the deal.
Stop looking only at the monetary figure, the figurative "sticker price". Look at all the elements that come into play that contribute to your actual cost.
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| | Wednesday - How to Avoid a Common Strategy Problem Any Dog Would Know - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Hot dog!
In English, we have a number of dog expressions all of which are interesting idioms but one of which, in particular, is instructive for medical group leaders. No, it’s not to “avoid dogs” (which, by the way, is culturally insensitive to dogs . . . just kidding); it’s to not let the tail wag the dog.
For readers for whom English is not your native language or, for some, not your 2nd or even your 3rd, the expression means to not let things of lesser importance control something of greater importance. As such, what appears to be a silly saying packs a lot of meaning into a few words.
Why then do we see medical group leaders pursuing, sometimes at great expense in time, effort, and money, things which clearly are “tails” wagging the entire group’s success, or even existence, i.e., the dog?
For example, take Pulmonologists of the Upper Peninsula (“PUP”), a group providing services out of three offices, each located near a hospital campus. Duke, PUP’s leader, gives one physician, Dr. Boots, an exception to the group’s hard and fast rule that all employed physicians must devote their entire professional efforts to the group's business. Why? Because Duke doesn't want Boots to leave. Yet, Duke hasn't factored in that once an exception has been granted, it can quickly result in jealousy, anger, and a slew of additional requests, no, demands, to permit others the same “kindness”. The group becomes unstable. Why risk the group to, perhaps, save the relationship with one physician? What other ways were there to save the relationship with one physician if it should be saved at all?
Or consider, Spike, a former sans-medal Olympian turned orthopedic surgeon, an otherwise control freak who’s fixated on creating a joint venture with a not-for-profit hospital. But why, one might ask, when nearly any joint venture with a not-for-profit hospital will result in lack of control? Is it to “have” one?* What is in Spike’s actual long-term interest and is it really advanced via a joint venture? How might it be better advanced?
The takeaway here for you is that it’s essential that you first consider what’s most important for your group’s success. What truly drives that success and is what you're considering minor, or at least minor in relationship, to it. What decisions should be subordinate to overall strategy and success? What seemingly small decision might upset the larger strategy or success? What seems to be important, but, actually, isn’t?
The corollary is that significant business decisions can’t be made in a vacuum. No decision of any import can be made piecemeal. Almost every decision must be made in the context of the group’s overall strategy. As I like to say, “it’s all related.”
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*This issue is by no means particular to medical group leaders; it’s a management disease that runs across professions and industries. Years ago, my firm occupied the 17th floor in a building in Los Angeles. Another firm occupied both the 16th and 18th floors. The managing partner of the other firm asked to meet with me concerning swapping floors with us so that their two floors would be contiguous. When we met, I asked him why that was so important to him and he said that he wanted to put in an open staircase between the floors, something that I knew might cost close to a million dollars. I then asked him why an open staircase was so important to him, and he burst out, almost screaming, “because the office in New York has one and I want one, too!”
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| | | Listen to the podcast here, or just keep reading for the transcript.
"We're screwed. The hospital won't renew our contract."
"My boss says that if I don't take a 10% cut, she'll have to find another associate."
Medical groups and individual physicians often complain about the hand they've been dealt. They seek a strategy to deal with it. In some cases that strategy exists. In others they have waited too long before seeking help.
But what they generally don't realize is that there are other grand strategies.
Instead of seeking a way to deal with the situation at hand, that is, the solution to the game you've been playing, you should consider directing energy toward changing the entire game.
There are examples of this all around, both in healthcare and outside of it. For example: Dermatology practices that have become medical spas. Anesthesia groups formerly trapped by hospital contracts have become larger players choosing which hospital contract to consider. Single specialty practices have become multi-specialty. OB-GYN practices have become women's health centers.
Adjust your thinking: It's your deck of cards. If you don't like the game you're playing, pick it up, go home, and find a new way to deal it out.
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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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