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| Dear Friend,
There’s an old saying that a person doesn’t really want a drill, they want a hole. I actually think there’s yet another level of thinking.
That's the subject of this past Monday's blog post, Don’t Let Models Dictate Your Business Structure. Follow that link to the blog or just keep reading for the whole story:
There’s an old saying that a person doesn’t really want a drill, they want a hole. I actually think there’s yet another level of thinking – why do they want the hole? Perhaps it’s to hang a painting.
The same idea holds true with many healthcare structures, whether it’s an IPA, a clinically integrated network (a “CIN” – which they might be if they’re not structured right!), and so on.
These really aren’t destinations. In our metaphor, they aren’t the painting on the wall. In fact, they’re not even the hole.
What they are is the drill. They’re tools that describe a method of getting you to the business entity or outcome that you seek to create or achieve. They’re not ends in and of themselves.
On the one hand, you can view this as a mini-lecture on the fact that business structures are tools to achieve your desired end.
But my main point is somewhat different: What’s most important for you is to first decide what it is, on a business level, that you’re trying to achieve.
Forget for the moment (but only for the moment!) about legal structure and compliance and the fact that it’s a “fill in the blank” such as a CIN.
Instead, simply concentrate on what it is, bottom line, that you want to achieve.
Then, and only then, should we ask the question of what tool or tools . . . the specific structure or structures . . . can be applied to get you there. |
| | Tuesday - Success in Motion Video: No Short Term Solutions For Long Term Problems
Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript: |
| We often see in the news, certainly in the financial press, some story criticizing some publicly traded company, a chief executive officer, or the board, for doing some deal, or coming to some position, as a short-term solution to a problem the company has. For example, it could be a short-term solution for the fact that revenue is headed down the toilet.
The company executives take this sort of action, as the press reminds us, because their performance is gauged on a quarterly basis; they’ve got to make their numbers.
In a sense this is no different than a flat tire. Certainly, when I was a kid, when a tire would go flat (and car tires would go flat all the time) you would basically take them to a gas station and have them patch it. The patches were akin to patches put on bicycle tires. They held for a while, but not for long. Those were short-term solutions to long-term problems.
All of us have long-term problems and all of us are inclined to find the easy fix, the quick fix, to put the bigger issues, perhaps the more expensive issues, off into the future. So, we’re attracted to those short-term fixes.
But in the long run, short-term fixes don’t correct long-term problems – the business which is headed in the wrong direction, the business with the wrong model, the medical group that is suffering a challenge from some competitor which it forces out of one deal but doesn’t really resolve the overall problem as to why that other group is being seen by customers (whoever they may be) as a viable alternative.
I’m not saying that every problem is a long-term problem. I'm not saying that short-term solutions can't be used. But they have to be used in the context of short-term problems.
If you have a long-term problem, you must come up with a long-term solution.
If not, then you're simply fooling your investors and your partners.
And worst of all, you’re fooling yourself.
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| | Wednesday - Medical Group Minute Video: What Herman Cain Knows About The Defect In Medical Group Compensation Plans
Watch the video here, or just keep reading below for a slightly polished transcript:
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| Herman Cain withdrew his name from consideration for a Fed seat because he couldn’t afford (or didn’t want) to work for the relatively low pay.
So, how can you expect one of your partners to devote time to running your medical group, if you won’t compensate him or her for it?
After all, you get what you pay for.
If you try to get it without paying for it, you won’t get much of it, at least not of high quality.
And you are probably stealing. The irony is that you are stealing from yourself, from your future.
Medical Group Compensation Plans
What does your medical group’s compensation plan compensate for? The usual answer is “productivity,” whether measured in units or minutes or by some other standard.
If your group compensates for X, you will get more of X. So if X is units, your group’s physicians will be motivated to maximize their production of units.
But if your group compensates for X and also wants Y, you will get a lot of X and not very much, if any, Y.
For many medical groups, Y is leadership. They want their group leaders to lead, but their compensation plans incentivize only the production of units.
Is it any surprise that the “leadership stuff” is relegated to the wee hours of the night or even to the wee hours of never? Is it any surprise that there’s no actual leadership, only “consensus?” Is it any surprise that the leaders schedule business meetings at 7 pm or on weekends, signaling amateur status?
If you don’t pay for leadership, you won’t get much, if any, of it. You will create tension. You will create resentment. But you will not create leadership.
You’ll be stealing from the leaders – either from their ability to generate units or from their time for themselves or with their families.
And, as a result you will get a very weak form of leadership, one that results in your group stealing from its own future in the form of poor decisions and lost opportunities.
You’ve got great plans to take over the region or to simply protect your position at one facility. You expect your leaders to achieve that goal. Yet you’ve incentivized them away from your goal. Don’t blame them when you never get there. Blame yourself.
It’s time to make sure that your group’s compensation plan is in synch with your group’s business strategy and future.
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| | Thursday - Podcast: Physician Discontent With Hospital Employment Beginning To Boil |
| Listen to the podcast here, or just keep reading for the transcript.
Perhaps it’s only anecdotal, but the several hospital executives and well-connected hospital-affiliated physician group leaders I’ve spoken within 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.
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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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Come listen to Mark speak in sunny
Las Vegas on June 5, 2020, at The Advanced Institute for Anesthesia Billing and Practice Management.
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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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