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| Dear Friend,
Models.
Models, no not the skinny kind walking the runway or even the plaid wearing types in an L.L. Bean catalog.
But the guesses that are given gravitas. “Our guess is that blah blah blah” sounds like, well, a guess. “Our model reveals that blah blah blah” sounds far better educated. And, “our predictive model” — sheesh, it must be true; give the scientist a Nobel prize.
But as anyone still alive knows, models are just guesses. Make an error in design, put the wrong data in, or hold your metaphorical finger on the “algorithm” so that it gives you the desired outcome, and sooner or later, the "guess” is revealed, Wizard of Oz style, to be less than all-seeing, perhaps even as a prediction by a panderer with a publicist.
Are these the ramblings of an “anti-modelist”? No.
The reality is that we all construct and use models. Often, these are mental models, concepts or representations about how the world works. These concepts can be grand, as in the concept of human rights, or specific, such as in the concept of hospital-centric healthcare.
In fact, the more models we use to understand the world, the better. It’s like the difference between looking at a picture of someone only from the back, versus a series of shots from every angle, plus maybe even an MRI.
But here’s the thing: Models are fine as long as we don’t confuse them for reality. Take, for example, a map, which is a type of model. It’s an error to confuse the map with the actual terrain. It’s an even bigger error to blame the terrain for not matching the map.
Yet, we see modeling errors play out all the time in healthcare.
For example, many hospital CEOs bought whole hog into purest model of hospital-centric healthcare in which physicians would be “aligned” via direct or indirect employment. They ignored the input of other models. Billions were spent acquiring practices. And then, reality hit. These behemoth entities were almost universally unprofitable and were far more fragile due to their bloated overhead. Add a few months of coronavirus cancellation of both elective procedures and nearly all physician office visits, and, well, it’s either bankruptcy time or, how do they put it, oh, time to consider merging with a strategic partner. Sick hospital plus sick hospital equals Sears plus Kmart.
Or, consider a far more everyday modeling mistake; the physician group leader who believes that hospital contracting, say for an exclusive contract, follows a certain process and that all negotiation takes place within its “traditional” bounds. It’s certainly true that hospital CEOs want physician group leaders to completely buy into that mental model, but you're blind to possibility if you actually do so.
The takeaways for you involve understanding a few problems to avoid:
You need to understand that multiple models, not simply blind adherence to one, are useful to inform your analysis, decisions, and actions.
You need to develop the ability to cycle faster through the analysis of your model as it hits the windshield of reality, and then to cycle faster through the process of deciding on and taking your next action, that is, a faster cycling through the OODA loop.
Note that I said that those were needs. They may not be your wants. But not wanting to do something that needs to be done is simply an example of a model that has no utility in this real world domain.
P.S. We’re designing a small group program for medical group leaders like you who want to understand the secret sauce underlying opportunistic action. If you’d like to be on the invitation list, send a message to one of my assistants.
Act fast! |
| | | Business Life in the Time of Coronavirus Mini-Series
The coronavirus crisis caused a short term economic crisis for many medical groups. Our mini-series shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
[If you haven't already seen them, follow this link to watch our entire series.] |
| | Tuesday - Think Strategy Like a Grand Master
Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript: |
| They say there’s no correlation between the skill of a chess master in terms of translating it into life strategy off the chess board. Maybe that’s true. Maybe it’s not.
I want you to think about being a chess “grand master” in terms of structuring deals. Even before that, it’s “why” are you structuring the deal? What is the end-game? What’s the liquidity value - If we were to translate this into terms that might be used by a private equity buyer putting money into a venture. In other words, how are you going to get your money back out? What is the very end game monetarily in the long-term strategy?
So as opposed to seeing events in business (deals, contracts, relationships) as simply tactical (as in one singular deal or acquisition, or structuring of an ASC) think beyond simply the fact that you are opening the center or doing x deal.
What are you going to do with the center in five and ten years? Or is it part of a future sale, or is it part of the creation of something larger, like a chain of surgery centers? Or are you building a chain of surgery centers, physical therapy, imaging and other elements – in essence the creation of a mini-system to drive profit during the operational time and also to groom for sale later?
How you’re going to structure the deal and who you want as part of this team all factor into this – and surely more than on a piecemeal basis.
So maybe you should be thinking like a chess grand master.
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| | Wednesday - This Is Why You Keep Screwing Yourself When Negotiating Deals
Watch the video here, or just keep reading below for a slightly polished transcript:
Location: The center of the negotiation universe.
Date: Yesterday, today, and, one hopes, not tomorrow.
The lesson: One of psychology.
It happens time after time. You're in the midst of negotiations for this deal or that.
You know that you should push for the points that are crucial. But then, you pull yourself back like a dog on a leash.
The problem, which can hardly ever be seen from inside the situational loop, is that you want, even need, to be liked. "Am I pushing too hard?" "What will they think?"
As a result, your inclination is to please when it should be to assert and advocate for your position. You give the other side more time when you know that time should be used as a tool against them. You give them the benefit of the doubt when they've never given it to you. You can’t do the deal for less than X but you do it anyway.
There are multiple "treatments" available for this condition but the fastest, easiest, and, yes, cheapest, is to remove yourself from the direct negotiating loop.
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| | Thursday - I Can See Clearly Now. Opthamology Group Settles Fraud Claim |
| Listen to the podcast here, or just keep reading for the transcript.
Ah, hindsight. It's always 20/20.
Arguably, a Southern California ophthalmology group should have had its compliance eyes checked a few years ago.
According to a press release issued by the Department of Justice, Retina Institute of California Medical Group, a number of its physicians, its former CEO, and several related entities entered into a civil settlement, agreeing to pay a total of $6.65 million to resolve allegations that they defrauded public healthcare programs.
Among the allegations were that Retina Institute and the other participants billed for unnecessary eye exams, improperly waived Medicare co-payments, and violated other regulations.
The settlement arose out of a whistleblower complaint filed by . . . wait for it . . . two former Retina Institute administrators who will receive a to-be-determined share of the settlement funds.
Specific allegations against those settling were that bogus claims were submitted to Medicare and Medi-Cal in that simpler exams were billed as more complex, and that claims were filed for medical services that were not performed, that were unnecessary, or were undocumented in medical records.
In addition to Retina Institute, among those participating in the settlement were Drs. Tom S. Chang, Michael A. Samuel, and Michael J. Davis, former administrator Brett Braun, California Eye and Ear Specialists, and San Gabriel Ambulatory Surgery Center LP.
Note that the settlement is just that, a settlement of alleged claims, and none of the defendants admitted any liability.
The story, and others like it, underscore the fact that compliance is not simply a plan; instead, it has to be in ongoing set of behaviors. Additionally, medical groups and facilities should engage in a regular program of auditing, both internal (e.g., regular reviews and red teams) and, importantly, external audits.
If you learn only one thing from this post, understand that in compliance matters, foresight is always better, and a heck of a lot cheaper, than hindsight.
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| | | Calibrate Your Compass
Read our exclusive RedPaper to guide you through this evolving situation.
The coronavirus crisis caused a short term economic crisis for many medical groups. Our RedPaper shows you the way out. Plus, many of the concepts discussed are applicable during both good times and bad.
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| | Help Us Help You With Helpful Content
What tailored content would you most like to see during this time? How can we focus on solutions to your most pressing strategic concerns?
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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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