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Dear Friend,
How quickly and effective does your medical group make decisions? Both decisions that are proactive and those that are reactive?
How quickly and effective does your medical group make decisions? Both decisions that are proactive and those that are reactive?
I’m by no means assuming that your medical group is broken. What I am assuming is that, no matter how it’s structured, there’s room to improve its governance structure.
[If you haven’t read it yet, get a complementary copy of my book The Medical Group Governance Matrix. Or you can buy the book in hard copy on Amazon.com.]
Here’s the point in a nutshell:
No matter how your group is structured, whether as a partnership of limited liability entities, whether as a professional association, a medical corporation, or so on, it has, whether by design or by default, a governance structure.
Governance structures can vary from what I call the “strong leader” set-up in which one person is charged with running the group, a sort of benevolent dictator, all the way to a board structure, that is, a corporate type structure, whether or not your practice entity is a corporation.
No matter the type of structure, the central issue is whether those who are leaders are empowered to actually lead, or whether they are hobbled, either by rules or by group culture into a situation in which voting across a large number of people is required, or consensus among a large number of people is required, before even, for example, a “strong leader” can take action.
What that results in is gummed-up governance because the group can’t respond to threats, it can’t even respond to questions, say from a hospital with which it has a contract, without significant delay.
It also hobbles the group in terms of taking proactive action, because when you turn to a number of partners for consensus, you’re setting yourself up for a watered-down position. And, there’s the danger of falling prey to fear among many that taking on, for example, new facilities or new group members, might threaten them in one way or another.
The first step is to establish the baseline: In what shape is your group’s governance structure, not simply as documented but in actual practice? Where do you actually want to be? Where might you be?
That process starts with a governance audit.
Again, I’m not assuming you’re broken, I’m assuming you can get better, more efficient, and more importantly, more effective. |
| | Tuesday - Success in Motion Video: Consider the Concept of Segmenting Your Service Offerings
Watch Tuesday's video here, or just keep reading below for a slightly polished transcript: |
| | I am headed to Chicago for some meetings, so I’m thinking about airplanes.
I listened to a very interesting podcast over the weekend called “The Soul of Enterprise.” It’s a business podcast mostly aimed at accountants, but it applies to other professional service providers as well.
The hosts were talking about the notion of, and I forget the term they used, it wasn’t “segmenting your market,” I don’t believe, but was something like “yield management” which is the concept that airlines use to maximize the profitability from pricing the seats on a plane, and of course, on how they segment those seats, thus the concept of segmenting the market.
In other words, they carefully segment into so many first-class seats, so many “premium” coach seats or whatever they call them on the airline, and so many regular coach seats including those dreaded ones back by the restroom at the tail of the plane.
Airlines have figured out that there’s different customers who are flying for different reasons, and at different price points. They’ve also figured out that some are willing to travel in a slightly different style. It’s not that the people who fly first class get from Dallas to Chicago any faster, and it’s not the case that anyone flying from Dallas to Chicago is any safer as a result of paying more money to fly first class as opposed to paying bottom dollar, Priceline fares to sit next to the restroom in the back of the plane.
And yes, there's an analogy here to healthcare.
I’m not about to suggest that any of you cut back on the quality of the medical service that’s being delivered to patients. Instead, I am suggesting that you think about how the pricing model, the value exchange model on an airplane can be instructive in terms of how you provide different tiers of service to your patients.
A similar concept is certainly applicable to office practice physicians. There’s the whole notion in internal medicine and family practice of concierge medicine, which is a complete transfer of the notion of first class care, meaning first class customer care, first class human touches, as opposed to, for example, a clinic setting in which the medical care is just as good, but the surroundings in which it's presented and the level of services differs wildly.
Different patients have different expectations in terms of how soon they will be seen. Different patients have different expectations about how they’re treated. Are they shown to a separate waiting room or are they just plopped in with everyone else? And so on.
Different patients would attach different price points to the level of service and interaction.
It's also true that payor considerations screw up a lot of this, but certainly not all of this. And, for many of you who are escaping an insurance model, it doesn’t hinder your development of a segmented care "cabin" but feeds right into it.
Think about the way business models in other industries segment customers by the level of service those customers want. And, are willing to pay for. Think about how those or similar concepts can be applied by you.
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| | | Wednesday - Medical Group Minute Video: What You Need to Know About The High Cost of 15 Minutes of Fame, HIPAA Edition
Watch the video here, or just keep reading below for a slightly polished transcript:
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| 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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| | Thursday - Podcast: Hospitals Beg To Be Aligned By Physicians! |
| Listen to the podcast here, or just keep reading for the transcript
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.
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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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