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| Dear Friend,
Remembrance.
That's the subject of this past Monday's blog post, Memorial Day 2020. Follow that link to the blog or just keep reading for the rest of the story.
We analogize business to war. Litigation to battle. Negotiation to struggle.
We tend to forget that our ability to engage in analogies while safely ensconced in our homes and offices is due in large part to those who gave their lives in real war, in real battle, in real struggle.
Let’s remember.
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| | | 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 - Walmart Explores New Healthcare Delivery Concept
Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript: |
| I read a news release about another healthcare venture by Walmart. This one’s interesting.
Picture a large Walmart store with an extremely large parking lot sitting in front of it. In some cases that parking lot is even bigger than what’s required by codes.
Walmart's exploring the concept of creating Walmart “town centers” which are essentially the creation of a parking lot “mall” around a Walmart store, in which they’ll lease space to stores that don’t compete, but complement, the offerings of the Walmart. Healthcare practices are on the list.
Here are a few takeaways for you:
1.) Once Walmart establishes proof-of-concept, you can be pretty sure they’re going to big or go home. In other words, it’s either going to be something they pursue in many areas of the country, or it’s going to be something that they discover doesn’t work and they’ll simply lease to non-healthcare ventures or even drop the whole initiative.
2.) Even more importantly, it means an interesting type of new opportunity for physician-led ventures. Certainly, it could be the establishment of a clinic or an office location at a Walmart town center. But it can also be looking at locations adjacent to other big-box type anchor tenants, as in a mall, in which a mall developer places very large department stores at key points in the center and then leases at far more profit to lots of specialty retailers in between. Maybe that’s a model that’s dying in parts of the country due to Amazon, but certainly the Walmarts and other similar big-box draws pull in tremendous foot traffic – patient traffic.
Ask yourself what kind of deals can be made with those types of patient magnets for more consumer-type medical facilities.
For example, in concert with my development colleague, we’re looking at existing surgery center ventures as well as at a wide range of real estate-oriented ventures, whether it’s built-out space for surgery centers, medical office buildings, imaging facilities, or what I call “Massive Outpatient Clinics”, ventures with all of the elements of a hospital without the money-sucking sorts, the type that requires union labor and too much investment.
Get in touch if you want to discuss your situation. Consider these sorts of opportunities as new ways of looking at your practice, business, or simply at what you do.
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| | Wednesday - Doctor Exclaims, "I Wasn't the Target So Why Are They Gunning for Me?"
Watch the video here, or just keep reading below for a slightly polished transcript:
Perhaps the target wasn't Day-Glo orange, but the wound was life changing, if not life threatening.
More often than not, whistleblowers file False Claims Act lawsuits against the entity they allege as being at the center of fraudulent activity, for example, the entity that is paying kickbacks. Whether that entity is a hospital, an ambulatory surgery center, or an implantable device manufacturer, the entity is typically the prime target because it’s the nexus of the claims that the whistleblower alleges are fraudulent.
Because the entity is, metaphorically speaking, painted Day-Glo orange with a gun range target on its front, back, and sides, many physicians involved in questionable "arrangements” often feel that they won't be swept up in the mess, that their risk is smaller.
Bypassing the issue of the difference between a feeling and either thinking or knowing, they are wrong.
Back on March 16, 2020, in my post, Free Stay Out of Jail Pass, I wrote about the FCA lawsuit in which the United States government intervened and alleged that SpineFrontier, a spine device manufacturer, and Kingsley Chin, M.D., its founder and Chief Executive Officer, as well as other Chin-controlled entities, paid spine surgeons over $8 million in sham “consulting” payments ostensibly for product evaluations, when in fact the payments were for the use of SpineFrontier devices.
In the weeks that passed, the government settled civil health care fraud claims against five physicians, each of whom admitted to seeking and obtaining kickbacks from SpineFrontier via a sham intermediary called "IME," for consulting work he did not perform, and then cooperated with the government’s investigation. Each of the five also admitted that one or more of SpineFrontier, Chin, or Aditya Humad, the CFO of SpineFrontier and a defendant, specifically instructed him to bill “consulting” hours to SpineFrontier for each and every surgery in which he used a SpineFrontier device, regardless of whether he spent any time actually consulting.
The five physicians are:
1. Dr. F. Paul DeGenova, an orthopedic spine surgeon in Ohio, agreed to settle the government’s claims for $486,985.
2. Dr. Michael Murray, an orthopedic spine surgeon in New York employed by the Department of Veteran Affairs, agreed to settle the government’s claims for $330,668.
3. Dr. Joseph Shehadi, a neurosurgeon in Ohio, agreed to settle the government’s claims for $323,419.
4. Dr. Agha Khan, a neurosurgeon in Maryland, agreed to settle the government’s claims for $310,843.
5. Dr. John Atwater, an orthopedic surgeon who worked in Florida and in Illinois, agreed to settle the government’s claims for $105,149.
And then, on April 24, 2020, Dr. Jeffrey R. Carlson, an orthopedic surgeon in Virginia, became the sixth surgeon to agree to settle with the government in connection with SpineFrontier. The "price" for his deal was astronomically higher: he agreed to pay $1.75 million to resolve the civil claims.
Dr. Carlson admitted that he estimated his purported consulting hours based on the number of times he used a SpineFrontier product in a given month, as opposed to tracking actual time he spent consulting. He admitted that he cannot document the consulting hours he submitted for payment to SpineFrontier and IME.
In addition, he admitted that he sought and received consulting payments from SpineFrontier for time he spent during his surgical procedures, for which Medicare and other federal health care programs were already paying him.
Last, Dr. Carlson also admitted to accepting free meals from SpineFrontier, for himself and his surgical staff, on almost every day that he performed a surgical procedure with a SpineFrontier product. In total, SpineFrontier provided Dr. Carlson and his staff meals that cost thousands of dollars.
Note that each of the settlements, which one may safely assume was made without admission of liability, relates to a civil action, only. However, you should bear in mind that the type of activity that was alleged to have occurred underlying the FCA allegations would also support criminal charges for violation of the federal Anti-Kickback Statute should the government bring them.
In other words, these civil settlements may not be the end of the matter for Drs. DeGenova, Murray, Shehadi, Khan, Atwater, and Carlson.
Of course, the same lesson, potential civil and criminal liability applies to anyone caught up in a kickback mess.
As I always say, think like a carpenter and measure twice (or even thrice), vetting each deal carefully with healthcare counsel, before cutting once, cutting your own neck, that is. |
| | Thursday - Walgreen Slims Number of In-Store Clinics |
| Listen to the podcast here, or just keep reading for the transcript.
A few weeks ago, Walgreens, the giant drug store chain, announced that it was planning to close the 157 in-store health clinics that it owns. It will continue to keep those clinics run by third parties.
Why close their own stores? They didn’t make money.
Instead, Walgreens is partnering with weight loss company Jenny Craig, which will place Jenny Craig consultants in approximately 100 Walgreens locations.
What this means for retail healthcare is unclear.
Walgreens profit is driven by sundries and over the counter products as well as by prescription drug sales. If, as it turns out, their foray into retail medical care didn’t make money, and didn’t drive more traffic into, and more sales from, stores, then it had to go.
On the other hand, despite Walgreens’ status as a large chain, it’s small compared with CVS Health and its well over 1,000 in-store retail clinics. With only approximately 150 owned clinic locations, some analysts believe that Walgreens lacked the scale to make retail health profitable, but of course, that’s just a guess.
My analysis is that Walgreens discovered that it’s more difficult to operate clinics than imagined. Retail stores are driven by sales and profit per square foot. Apparently, their third party partners are not clamoring to back out of their in-store clinic space leases.
Retail primary care remains a growth opportunity, especially when it can be leveraged by multi-specialty medical groups as a referral funnel.
Some specialty areas present similar opportunities, such as retail orthopedic clinics.
And, of course, for those medical groups which control ASCs or physician-owned hospitals, retail centers with high traffic and visibility are prime locations to facilitate new patient relationships.
Think health system moves, even if you aren’t a health system.
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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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