| View this email online if it doesn't display correctly |
|
|
|
| |
Dear Friend,
Are physicians beginning to get fed up with hospital employment?
Perhaps it’s only anecdotal, but the several hospital executives and well-connected hospital-affiliated physician group leaders I’ve spoken with in the past few weeks tell the same story: a spate of resignations by hospital-employed physicians.
Yet, at the same time, the healthcare industry press reports that more than half of the country’s physicians practice in hospital-affiliated groups. Perhaps that’s the problem.
Certainly, as the size of hospital-employed physician groups has grown, bureaucracy has increased. The stories of broken employment promises, the use of “quality” as an excuse for the reallocation of funds away from physician compensation, and so on, are leading to increasingly disgruntled physician employees.
This, at the same time that CMS (e.g., as in their several proposed regulations released July 29, 2019) (1) keeps expanding the list of procedures that can be performed, that is performed and reimbursed, in ambulatory surgery centers, (2) demands (high) price transparency on the part of hospitals, and (3) continues to recommend the reduction in rates paid to hospital outpatient departments, with the ultimate goal being parity with ASC fee schedule rates, which will be, for all intents and purposes, the end of the hospital outpatient department.
So what does this mean for you?
Most of my clients are not hospital employees. They are large groups or highly entrepreneurial physicians who see these changes in the overall market as rocket fuel for their success.
There are tremendous opportunities to gain patients lost in the shift of physicians leaving hospital-affiliated groups. Many of those patients are already themselves upset by the bureaucracy of hospital-affiliated practices and, especially, by the revolving door of medical care. They, too, are increasingly unhappy with hospital-centric healthcare. Yet, many of the physicians that those patients might follow outside of the hospital system will be unable or unwilling to take the entrepreneurial leap and thus pull their patients with them. Those “employee minded” physicians will be on the hunt for new jobs, too, with regular paychecks and little to no desire to ever become partners.
Additionally, the trend continues to show that surgeons as well as physicians performing what some might call “surgery-like” procedures but which are, for all intents and purposes, surgery, that is, interventionalists, for example interventional radiologists and interventional cardiologists, should all be considering the development of, or investment in, outpatient facilities, that is, in ambulatory surgery centers.
And, hospital-based physicians, certainly anesthesiologists and radiologists, must significantly expand their scope to include outpatient facility based practice. If not, the number of cases remaining within the hospital setting will require a vastly different way of staffing (i.e., fewer physicians) and of organizing your group.
Change is in the air. For most that means the smell of fear. But for others, it’s the smell of opportunity.
|
| | Tuesday - Success in Motion Video: FOBO – Fear of Branching Out
Watch Tuesday's video here, or just keep reading below for a slightly polished transcript: |
| | You're undoubtedly familiar with the term “FOMO” – Fear Of Missing Out – where people are terrified that unless they jump to do this or that, they will “miss out” on some fantastic opportunity.
However, the opposite problem, what I would call “Fear Of Branching Out,” FOBO, impacts many medical group leaders. Let me give you an example:
Let's pick an avatar, say the leader of an anesthesia group at Hospital X -- we’ll call it “Community Memorial St. Mark’s.” Let’s say there’s a cohort of seventy anesthesiologists, maybe CRNAs too, and they’re providing services pursuant to an exclusive contract. They’ve been doing it for fifteen years. And, now, another opportunity comes up at a facility five miles away. The group’s leader or leaders question whether they should even try to pursue the opportunity at the other hospital. Do they?
No they don’t, because, they rationalize, "We have to show that we’re dedicated to Community Memorial St. Mark’s. What if the hospital finds out we’re working someplace else? What if we can't manage both facilities?" Major FOBO!
Well, these days having a contractual relationship with only one facility is a sign of tremendous weakness, and it's being signaled loud and clear by our avatar group to the facility. That signal of weakness lets the hospital administrator know darn well that if you don’t enter into a renewal exclusive contract, there's no other reason for your group to exist.
Now think about that, pretending that you're the hospital administrator. You’re negotiating with someone on the other side, and you know that if they don’t take the deal you're offering, they’re screwed. They have no more reason to exist. How much pressure could you put on them?
The same dynamic exists in many other contexts. It could be a restaurant with one location and renewal of the lease. It could be – how about this one – an imaging facility with MRIs that would cost who knows what, but a prohibitive amount, to move, and you’re the landlord demanding high rent. How high is high?
On the other hand, I’ve represented clients in the past, groups that provided services at a single facility, who've rejected the hospital's final offer and walked away. They didn’t branch out, didn’t go and cover many facilities, didn’t spread the risk of loss of a contract over the course of many facilities, but they’ve still walked, dissolving the group.
But most groups won’t walk, most groups cave.
Don’t put yourself in the position of having to cave simply to preserve whatever vestige of business remains. Build your negotiating strength and do it through building your options.
Think about it. The more options you have, well, the more options you have.
|
| | | Wednesday - Medical Group Minute Video: Fraud on Physicians in the ASC Setting
Watch the video here, or just keep reading below for a slightly polished transcript:
|
| As the shift of surgeries from the hospital setting to the ASC setting accelerates, we’re seeing more fraud at the ASC level.
No, I’m not talking about the significant amount of fraud that comes from the “usual suspects,” criminal operators who bill for medically unnecessary procedures, for procedures that never occurred, and so on.
Instead, as more physicians rush to invest in ASCs, unscrupulous facility promoters/managers scheme to separate physician investors from their money.
This fraud on physicians takes various forms, from securities fraud arising from misrepresentations, failures to disclose, and outright disregard for federal and state securities regulations and the exemptions therefrom, to sophisticated (and even Clouseau-like bungled) financial fraud on investors within the facility’s business operation.
“Compliance” in terms of investing in a surgery center is generally thought of as paying attention to the federal Anti-Kickback statute, state law referral prohibitions, and similar concerns. However, for physician investors it’s equally important to pay particular attention to vetting the overall structure of the deal and its promoters, the past history of the center’s operations, and the conflicts of interest and related-party dealings of those purporting to “manage” the facility.
Think of it this way: The last time I checked, a “physician-money-ectomy” isn’t on the Ambulatory Surgery Center Fee Schedule.
|
| | Thursday - Podcast: Why You Must Understand the Intersection Of Incentives And Negotiation Strategy |
| Listen to the podcast here, or just keep reading for the transcript
In the Wild West days of the 1980s and 90s, it wasn’t uncommon to see as many medical directors receiving stipends from a hospital as there are aspirins in a Costco-size bottle.
There were medical directors of this and medical directors of that. All designed, of course, to cement or bond or align (which, in 1990, was a word chiefly applied to automobile wheels) physicians who directly or indirectly referred significant numbers of patients to the hospital.
Sure, lots of those arrangements were legal. But lots weren’t.
Due largely to enforcement actions under criminal (the federal anti-kickback statute and state counterparts) and civil (the federal, i.e. Stark, and state prohibitions on self-referral) regulatory regimes, the occurrence of softball, fluff, and close-to-or-actually-completely-BS medical directorships waned considerably over the ensuing years.
But they didn’t go away.
Consider the warning shot fired by the Office of Inspector General of the U.S. Department of Health and Human Services (the “OIG”) in its June 2015 Fraud Alert: Physician Compensation Arrangements May Result in Significant Liability.
In the Fraud Alert, the OIG warned that physicians entering into medical directorships must ensure that they involve fair market value for bona fide services that the physicians actually provide. The OIG warned that a compensation arrangement may violate the anti-kickback statute if even one purpose of the arrangement is to compensate a physician for his or her past or future referrals of Federal health care program business.
The Fraud Alert cited the OIG’s settlements with 12 individual physicians who were alleged to have received improper medical director compensation. The OIG alleged that the compensation violated the anti-kickback statute for a number of reasons, including that the payments took into account the physicians’ volume or value of referrals and did not reflect fair market value for the services to be performed, and because the physicians did not actually provide the services called for under the agreements.
Today, and tomorrow, as more and more surgical procedures leave the hospital setting for ASCs and other outpatient facilities, query whether hospital administrators will revisit medical directorships with renewed fervor as they seek ties that bind.
Certainly, many medical directorships can be structured to be in compliance with applicable law and regulation. Others are simply attractive traps: they are ties that blind.
Among the many factors that physicians must consider when vetting and negotiating medical directorships are: (1) the demonstrable establishment of fair market value; (2) the actual, provable, and documented performance of duties; and (3) the relevance of duties (e.g., tasks and responsibilities that are not duplicative of hospital administrative staff roles).
Of course, for maximum assurance, directorship deals should comply with the relevant federal anti-kickback statute safe harbor. And, if the physician is in a position to refer for designated health services under Stark, the deal must fit within one of that law’s mandatory safe harbors.
|
| | | | 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
|
|
|
| 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.
|
| | | | 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. |
| | | |
|
