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| Dear Friend,
Screwed over by one of your partners.
The physician group that held the exclusive contract for a decade was out. One of its physicians, who, as a partner, owed his group a fiduciary duty, now magically sat on the management committee of the group that had displaced it; he had advocated for the new group’s RFP bid.
A seemingly unrelated Delaware case from the world of corporate mergers reminded me of that sorry story, one that's played out several times for clients over the past decade, one that never ends well for Dr. Quisling.
In the Delaware matter, its state Supreme Court reinstated lawsuit claims against John Haley, the chairman and CEO of Towers Watson & Co.
Mr. Haley had led Towers’ negotiations in a merger with another entity, Willis Group Holdings. Although the Towers board knew, when it empowered Haley to lead the negotiations, that Haley would likely become the head of the combined company and receive a significant increase in pay, Haley neglected to inform the board that one of Willis’ directors, who was also the Chief Investment Officer of a fund that was a large Willis shareholder, had discussed with him the details of what that pay package could be: a better than 500% raise over his current Towers compensation.
Returning to the confines of medical group strategy, double dealing and breaches of fiduciary duty can be used offensively and defensively.
Offensively, errant fiduciaries can be called to task for breaching their obligations.
And, so, too, might the other side and even their advisors. In the Towers Watson & Co case, the court also reinstated aiding and abetting claims against both the Willis director and his employer.
Consider, then, whether the opposite party, whether an outside group, the hospital, or even an “RFP consultant” advising the hospital might also be liable as a co-conspirator.
Defensively, heightening the awareness of potential fiduciary liability can be used to hold quisling group members in check until they can be isolated and dealt with appropriately.
Additionally, other, more sophisticated defensive moves involve structuring group governance in a manner to create and highlight group members’ fiduciary duties. Those defensive structures are effective even in the absence of enforceable covenants not to compete. The process starts with a governance audit.
Contact me today to discuss a governance audit of your entity. |
| | | 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 - Compound King Breaks Bad Gets Creamed
Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript: |
| It's a beautiful day. That is, unless you are looking at it through the bars of federal prison.
I want to talk with you today about a guy who compounded his life by compounding pain creams.
George Tompkins is his name, a pharmacist who fancied himself the “compound king.” He, together with his wife, ran a pharmacy in Houston, Texas.
Somehow, the Tompkins got involved in a compound pain medication scam in which the government alleges that $21 million of illegal (i.e., fraudulent) billing was submitted to and paid by the federal government. They were indicted.
At trial in March, George was found guilty. In June, he was sentenced to what is effectively a life sentence: He’s 75 and was sentenced to ten years in prison.
Ms. Tompkins, George's wife, either had a better lawyer or was slightly less culpable -- she received a minor sentence when she plead out long before her husband went to trial.
A third individual, Anoop Chaturvedi, a U.S. resident from India, was also indicted. He's now a fugitive and the FBI is on his trail.
Although there's a big dose of Schadenfreude involved in the story, that’s not what I’m trying to get across to you. Instead, if you’re a physician, and there's almost always a physician involved in these scams, you have to be extremely wary because these deals almost always end poorly for the physicians, as well as for the the pharmacists, and for those who are usually at the center of this, the marketers.
Turning the usual physician - patient relationship on its head, compound medication schemes center around marketers who make phone calls and run scammy websites to lure in federal healthcare program patients. Once in the queue, patients are then transferred by phone bank operators to "on call" physicians who write prescriptions (generally never seen by the patients) for patients with whom they’ve had no prior contact.
Thus the patients were never "real" in the sense that the drugs were "sold" to them via a patina of physician involvement.
Additionally, pain cream or other compounded medication scams rarely involve what are legally "compounded" medications. Instead, they usually involve illegally manufactured drugs: drug combinations that are manufactured in bulk, not actually compounded on a patient-by-patient basis.
And, for the physicians involved, the schemes are replete with unlicensed practice of medicine issues (just where do those patients live and where are you licensed?). Of course, other elements of the scheme, such as prescribing for "patients" who might not actually be patients in the view of your state's medical board add other licensing violations into the mix.
How do physicians get lured in to these schemes? In my experience (and I’ve seen this multiple times) it’s because they’re going to make a boatload of money for little work, the greed factor.
Don’t fall for it.
Invariably these schemes are crimes. Ten years in jail is nothing to sniff at. Invariably they lead to professional discipline, too.
Don’t believe what the perpetrators will tell you, which is that they’ve checked it out with their lawyers (even a large firm) who’ve told them that it’s fine.
Get your own representation because you’re going to need it sooner or later. That is, either now, before you get involved, or later, when you're indicted.
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| | How to Deploy the Secret Sauce of Opportunistic Strategy
Webinar On Demand
They say that COVID-19 has changed the world, creating the "new normal." Many of your colleagues and many hospital administrators are running scared.
Others, leaders like you, know that crisis means opportunity.
Let me provide you with the strategic tools and insights that you need in order to seize opportunities, whether they’re in the context of your current business relationships, the expansion of your business activities, or the creation of new ventures.
You will learn:
•Defense as a defective default: It’s necessary, but not sufficient.
•Exploiting weakness: Drop the guilt and identify opportunity.
•Flat line negotiation is fatal: Understand its myths and limitations.
•Negotiation reality: Learn to identify and deploy on multiple planes to affect the outcome.
•Maneuver: Harness the power of maneuver, both in overall strategy and in specific negotiation strategy.
Others see a crisis and freeze in fear. Learn how to see the opportunities and obtain the tools to increase your odds of obtaining them.
The price to attend is $479. The cost of not attending is astronomical. |
| | | Wednesday - Why the Lack of Power Corrupts Absolutely: Dealing With Petty Bureaucrats – Redux
Watch the video here, or just keep reading below for a slightly polished transcript:
A few months ago, while waiting at the gate for a flight, I couldn’t help but notice a gate agent making some woman unpack and repack and unpack and repack her expandable carry-on suitcase because it was too wide to fit into the measuring “box” for carry-on luggage.
It was obvious from the gate agent’s face that she took sublime pleasure in the exercise of her “power.”
When I commented to her a few minutes later that I next expected her to make the woman remove her underwear, she responded, “no one gets on my flight unless I say so.”
The reality is that such mini-dictators, the peons of bureaucracy, are nearly replete of any actual authority. Frustrated by their inability to control their destiny, they act out their near total lack of authority by overcompensating within the one slice of power they have – in this case, the power to drive a woman close to tears because her suitcase had to be pushed into the measuring device instead of sliding right in.
You’ve run into these people. They’re at the DMV and the post office and the TSA.
And, they’re at hospitals: The petty mid-level “executives” who occupy places on an org chart that looks like IBM’s in the 1960’s or a plate of spaghetti. They are the bureaucrats who can say “no,” but who lack any authority to actually say “yes.”
Lord Acton commented that power tends to corrupt, and absolute power corrupts absolutely. It appears that the lack of actual power does the same.
The quiver required to effectively deal with these people includes multiple arrows. Some are polite, others are political, and more than a few are pointed. An effective strategy involves knowing when and how to get the petty bureaucrat to open the gate, when and how to get around him, and when and how to get him pushed out.
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| | Thursday - Walmart Understands Action. Most Physician Leaders Just Understand Reaction. |
| Listen to the podcast here, or just keep reading for the transcript.
Your local newspaper and even that national one that claims to print everything that's fit to be printed is telling you that the world as you know it is over. It probably is. But have they told you that the world as you can create it might be better? No. That's not good for selling ad space, especially to drug companies. As a result, most physician leaders are running scared. They're too busy correcting the missteps of poor group structure, poor governance, and poor management to think about strategizing for the future. Heck, if you don't think you're going to have a future, why strategize for it. Just react to what's happening, react to what you read, react to what you hear on TV. Problem -> Reaction. Fear -> Reaction. Crisis -> Reaction. But of course, not everyone thinks that way. Instead, they see opportunity: Problem -> Opportunity. Fear -> Opportunity. Crisis -> Opportunity. Let's take Walmart for instance. They are moving ahead with their third "Walmart Health" center, a facility designed to take food off of your plate if you're a primary care physician, the operator of a clinical lab or of an imaging facility, a radiologist, a psychologist, a dentist, an ophthalmologist, an otolaryngologist, or dietitian. Walmart doesn't think like you. They have a strategy to seize opportunity. They make decisions quickly. They act on those decisions quickly. They are inside of your OODA loop [read about it here]. They will open their third Walmart Health while the primary care doctors they're about to displace can't even figure out how to reopen after the "shut down". But the interesting thing is that the concept of maneuverability, taking fast action that iterates and iterates so quickly that your competitor cannot predict what will happen next, thereby creating confusion and the inability of your competitor to cope, has nothing at all to do with size. It lies at the core of the key to victory in the Civil War Battle of Missionary Ridge [read about it here] and at the core of the story of the flea that (metaphorically) killed the medical center CEO [read about it here]. And, it also lies at the core of developing and deploying the strategy for your group's overall existence and for each and every "negotiation" that takes place. I know it's a foreign concept for most readers, those who sit back to wait to see what "the hospital will come back with." But how's that worked out for you so far? We're designing a 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, here. And, if you learned anything by reading the above, act fast. |
| | | 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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