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Dear Friend,
Hospitals aligning physicians is old news. But hospitals begging to be aligned by physicians is something new.
Over the past decade or so, hospitals have spent countless hundreds of millions of dollars “aligning” physicians.
This so-called alignment has included acquiring physician practices, employing physicians in states without corporate practice of medicine restrictions, and, in states where hospitals can’t directly employ, employment through captive medical groups or foundations.
Hospitals claim that the idea is to “coordinate care.” But the actual goal is to control cash.
More recently, though, there's been an increasing tide of procedures flowing out of the hospital to outpatient facilities, chiefly to ambulatory surgery centers (ASCs). [If you haven’t already read my book The Impending Death of Hospitals, you should pick up a copy. You can get in on Amazon or you can download a PDF version for free on my website at advisorylawgroup.com.]
The notion is that as technology advances and as the safety of procedures in the ASC setting increases, more and more procedures are being added to Medicare’s list of approved outpatient surgery center procedures.
Because many if not all private payers follow Medicare’s lead on this, private payers, too, are pushing procedures out to ASCs because reimbursement is much lower and because outcomes are much greater: less chance of infection, more efficiency, happier patients paying lower copays and having much better patient care experiences.
And now we’re seeing something very interesting. In connection with my ASC work - my physician clients forming physician-owned ASCs - we’re seeing hospitals chasing those physician deals, asking, and sometimes begging, to be included as investors in the deal: They want physicians to "align" the hospital!
Hospitals understand that soon they will no longer be able to compete for many procedures that had been done on an inpatient basis and now and forevermore will be done on outpatient basis. They can no longer compete on the basis of having those cases performed in hospital outpatient departments (HOPDs) because reimbursement for the same procedure is up to 80% higher in HOPDs than in ASCs.
As a result, hospitals want to burrow their way into your ASC deal. But why would you want them to align with you? They’re simply after the control, and the profit, that they’re losing on the "hospital" side.
Many would answer that with, “Well, I want money from the hospital to help seed the ASC.”
But the bottom line is that if you vet the decision and the numbers in connection with whether it makes sense to form an ASC - and it does - why do you need even a million dollars from a hospital when in a year or two you could potentially be pumping out two million a year in facility fee profits without them?
Yes, it might be a short-term gain. But "hospital as co-owner" is usually long-term pain. |
| | Tuesday - Success in Motion Video: Making Your Business Anti-Fragile Rebroadcast
Tuesday's video was a rebroadcast of a popular Success in Motion Video. You can watch it in its original format here, or just keep reading below for an undated transcript: |
| | Nassim Taleb points out that there’s no word that describes the opposite of fragile.
“Fragile” describes something that is injured when shaken.
Something that is resilient isn’t the actual opposite of fragile — it isn’t made better when shaken — it's just able to withstand being shaken.
But antifragile, in Taleb-speak, describes something that is actually improved when stressed and shaken.
We’re at a point in time where there is increasing complexity and change in healthcare and its regulation. Depending on what happens in the 2020 election, we could be heading deep down the drain of healthcare for all, whatever that means. Would that be Medicare for all, or VA for all, or even something akin to that existing in Great Britain, the National Health Service, in which private practice continues to exist as a separate track? Who knows, any of those are possible.
Is it possible to apply the concept of antifragility to a medical group or a healthcare business? I’m not sure. But, certainly, there are things that you can do now to put your group into a better position, should one of those changes occur.
You can use my concept of the Scenario Survey Process™ (read about it here) to develop possible realistic future scenarios and then to devise a strategy that will help you not only survive, but thrive, in as many of those possible futures.
For example, consider a group or a practice that is currently dependent upon a single hospital or a single referral source. Those relationships are certain to become far more stressed in coming months. They are fragile.
Through the use of the Scenario Survey Process™ the group or practice can examine potential scenarios such as no change in the current regulatory regime, a scenario in which there is only a government option, or a scenario in which there is both a government option and a private option. Those are only examples and many more scenarios could be created.
How then could you begin to best hedge against any such scenario? What relationships can you create and to which facilities might you expand to not only devise a softer landing, but perhaps build a better launching pad no matter what happens?
I don’t have the one, simple solution to this. Nobody does. But that doesn’t mean you shouldn’t start thinking about it. In fact, you probably should have already started thinking about it in the past.
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| | | Wednesday - Medical Group Minute Video: How to Avoid The Second Biggest Mistake Medical Group Leaders Make
Watch the video here, or just keep reading below for a slightly polished transcript:
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| Someone at a conference asked me what’s the biggest mistake medical group leaders make. That’s easy, I told him, it’s not engaging me to represent them.
He told me to get serious. I told him that I was. So, he asked me what’s the second biggest mistake.
Many medical group leaders bemoan their group’s circumstances. Some feel caught in the hard place between increasing commoditization, what they believe to be the limitations of independent structure, and the pressure of regional or national groups or of hospital employment. Other leaders feel like bystanders as hospitals and hospital systems attempt to take charge of their medical group’s future through RFPs for physician services or through the closure of facilities and even bankruptcy.
As a result, they often believe in a future with limited choices, one in which they are followers or, worse, spectators. They begin to think in terms of being limited to sell to, or be subsumed by, a large group or hospital. They begin to think, even if they are not in a hospital-based specialty, that their future hinges on the hospital’s decisions.
But for those capable of strategic thinking and not merely tactical action or, even worse, simply reaction, there are multiple choices. For example, radically changing your business structure and method of business, expanding to new practice sites, merging with other independent groups, linking through MSO-like structures, and the creation of joint ventures.
Unfortunately, even when they become aware of alternatives, and of their mix and match nature, too many group leaders become confused. They don’t know what the next step is. They worry that that step might not be the right one. They don’t want to spend any money on their future. They want a sure thing. They don’t know how to get from where they are to where they want to be. As a result, they stop. Paralyzed. In place.
That’s the point that the second biggest mistake lurks. It’s timing, the failure to begin the process of moving past the doubt or paralysis when there’s more time to maneuver. Simply put, the time to get started was years ago, or last month, or yesterday. But none of those are available choices any longer, so today is the best choice.
There’s a thought tool to help with the first step.
First, don’t think about moving from where you are to where you want to be. That too often leads to simply improving your current situation, which is akin to building a fancier building on top of a known fault line. Instead, use your desired destination stage to pull you toward its completion. Take one step in that direction. Then take the next.
It’s imperative that you get started now and that you become willing to invest in your own future.
Will you succeed? There’s no guaranty. But at least you won’t be frozen; the deer in the headlights of someone else’s success.
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| | Thursday - Podcast: What You Need To Know About The High Cost Of 15 Minutes Of Fame, HIPAA Edition |
| Listen to the podcast here, or just keep reading for the transcript
Andy Warhol famously said, “in the future, everyone will be world-famous for 15 minutes.”
Well, a little bit more than 15 minutes of fame, television style, just cost three Boston area hospitals, Boston Medical Center, Brigham and Women's Hospital, and Massachusetts General Hospital, a collective $999,000.
I Wanna Be on TV!
The $999,000, paid $100,000 by Boston Medical Center, $384,000 by Brigham and Women's, and $515,000 by Massachusetts General, was required to settle charges brought by the U.S. Department of Health and Human Services, Office for Civil Rights that the hospitals compromised the privacy of patients’ protected health information (PHI) by inviting film crews on premises to film an ABC television network documentary series, without first obtaining authorization from patients.
Ah, the high cost of fame.
And to think, the administrators of those facilities could've avoided the mess if they themselves watched television news: In 2016, New York City’s New York-Presbyterian Hospital settled with OCR in connection with HIPAA violations related to the hospital’s “appearance” on ABC television’s “NY Med.” And that’s not fake news!
Lights, Action, HIPAA Violation!
Okay, I know you're smarter than these geniuses. But it still pays to heed HIPAA requirements when allowing film crews and televised media onto your premises, whether it’s a hospital, ASC, or physicians’ office.
As the director of the Office of Civil Rights said when announcing the recent $999,000 settlement, “Patients in hospitals expect to encounter doctors and nurses when getting treatment, not film crews recording them at their most private and vulnerable moments. Hospitals must get authorization from patients before allowing strangers to have access to patients and their medical information.”
The same rules apply to you.
HHS has very specific guidance for facilities and physicians in connection with media access on your premises. Other than in some very limited circumstances, among other things, HIPAA-compliant authorizations are required from all affected patients, blurring out faces and disguising voices is completely ineffectual in preventing disclosure of PHI, and reasonable safeguards must be in place to protect against impermissible disclosures or to limit incidental disclosures of other PHI that may be in the area even if authorizations are obtained.
Hey, we all like publicity, but “free” publicity that costs you close to $1 million isn’t free, is it?
The bottom line: It pays to understand the limits of HIPAA and the media before you’re on the news . . . for being on the news.
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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 here.
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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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