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| Dear Friend,
Is that PHI that you're texting?
That's the topic of this past Monday's blog post, The Use of Banned Messaging Apps Cost Wall Street Banks Close to $2 Billion. What Will it Cost Your Medical Group or Facility? You can follow the link to read the post online, or just keep reading for the rest of the story.
Banks, brokerages, and your medical group or facility’s potential violation of HIPAA?
In 2022, a group of the nation’s largest banks and brokerage firms settled with the U.S. Securities Exchange Commission for close to $2 billion in connection with traders’ use of unauthorized messaging apps, means of communication that violate the SEC’s rules on recordkeeping designed to permit regulatory oversight.
In one instance, the SEC alleged that traders used WhatsApp and other channels that did not preserve a record of the communication. In another allegation, traders were instructed to delete messages from their personal devices and to communicate through encrypted channels that skirted oversight.
Communication and data preservation in the financial world and the healthcare world overlaps in regard to the use of personal devices and unauthorized channels. Although the regulatory aims are different, oversight versus privacy and security, the potential for violation, including fines and penalties is the same.
Who, right now, might be texting PHI to a colleague? Who might have unencrypted PHI on their personal computer? Who’s using regular email to transmit a document containing patient names? Sure, you have a HIPAA privacy and security plan. But are you enforcing it? And, if not, what will it cost you? |
| | | | Wednesday - Deal School: Deal Divorce or Post-Closing Breakup Fees - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
Although not all M&A deals have them, breakup fees are commonly thought of as fees that a party has to pay, under the circumstances that are delineated, in the event that the party does not follow through and close the transaction.
For example, they're documented by way of language such as this: “As a result of the Company’s refusal to consummate the transactions contemplated hereby which refusal is not permitted by Section 14, a breakup fee of $1,500,000 shall be paid within three business days following termination by the Company to AcqCo.”
In that situation, breakup fees can be seen as a form of expense recoupment or of liquidated damages, and they also involve, depending on the circumstances, a degree of dissuasion or deterrence.
But there’s another less common or even “off label” use for breakup fees: A fee paid to undo the deal after it’s already closed. Although I’ll give an initial example from the M&A context, the concept can be applied in other domains as well.
In the M&A context, consider a deal in which your medical group has sold its practice to “Buyer X”, which could be a PE firm, a hospital, a strategic buyer expanding its existing operations, or anyone else.
As a part of the deal, your partners and you have remained with the practice pursuant to employment agreements. What if, say, 6 months post-closing, the deal just isn’t working out for you, not in the sense of Buyer X’s breach of any agreement, but in the sense that you and your former partners aren’t happy with the deal. For example, it could be a standard PE deal in which Buyer X painted a picture of post-closing Kumbaya when what actually resulted was post-closing to-the-bone cost cutting.
As a result, you want out. If a breakup provision, i.e., a “deal divorce” provision, had been negotiated into the acquisition agreement, it would provide a right, including a deadline for its election, a process, and a price for undoing the deal. There are many ways to structure a breakup provision of this sort and there are many related issues.
Breaking up might be hard, but at least it will be easier to do if you think about the process up front in the manner of a deal “prenup”. Might it be a bad strategy in some contexts? Absolutely. As is always the case, the devil is in the details.
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| | | Listen to the podcast here, or just keep reading below for a slightly polished transcript:
From down the street I could see the fortune teller's shop.
Did she know that I was coming?
Go ahead, laugh. But if you're a member of a 15 or more person medical group, do you have any clue, any clue at all, about your group's future?
I'm a fortune teller of sorts. I can tell you that most groups that I've come into contact with are as clueless as you are as to the future. Chiefly because they've never sat down to consider it. And, even if they've done that, they didn't take action to create their own path forward.
Instead they labor away at providing medical care. They may be very, very good at that laboring. But it doesn't help them in preparing for the future.
The skill set that helped them get from the start of their careers to the present, improving their skills and building their practice, is a hindrance to getting beyond the present circumstances.
Digging in, being collegial, even protecting the group's turf at Community Memorial St. Mark's hospital or the referral relationship with the Jones Internal Medicine Group will, at best -- and even then it's a leap of faith -- protect the group's current situation. In other words, it's a purely defensive move.
But the times (actually, any times) requires that you play offense.
Sure, you may develop a plan, implement it and fail. But failing forward faster is better than doing nothing and becoming a bit player in someone else's future.
You don't have to be a fortune teller to see that.
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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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