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| Dear Friend,
Contingency fees for medical care?
Let’s talk about contingency fees. No, not contingency fees in the sense of a personal injury or a medical malpractice lawyer. And no, not contingency fees in the sense of the type of contingent and blended fee deals that I do on transactions with clients from time to time.
Instead, I want to talk about you being on a contingency fee.
I certainly know that my audience is comprised chiefly of physician leaders, as well as the owners of healthcare facilities who don’t consider themselves on contingency unless you do some workers’ compensation work — which is sometimes a form of contingency work.
But what I’m talking about is a contingency mindset.
How would you conduct yourself and your practice/business if you were compensated only for a successful outcome? For purposes of this mind experiment, this thinking tool, it doesn’t matter how you measure “success.” It could be a happy patient, it could be a successful treatment or successful procedure, it doesn’t matter. But if that were the case, that you were only paid upon “success,” how would you organize things and operate differently?
It seems simple. It seems like it is a game. But think about it, because the reality is that you are on that contingency basis. Referral sources could leave you and facilities can terminate your contract. Patients could walk for someone across the hall or across town.
So spend some time thinking about it: How would you reorder your business, your practice, and your relationships, if the only way that you got paid was based on a successful outcome?
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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.] |
| | Watch Tuesday's video here, or just keep reading below for a revised, more polished transcript:
Let's talk about the "new normal”.
It appears that many believe that we are already at some sort of "new normal." They think that we're there, wherever that might be. You know, the cloth or blue bandana mask in the market, the line to get into Costco, the fact that only the patient can come into the surgery center, no family members allowed.
I don't think that we're anywhere close to being at the new normal. I fully expect that there will be continuing waves of Covid, continuing waves of Covid shutdown, and continuing waves of other shutdowns.
What do I mean?
Look at how governors have become emboldened in terms of shutting down major portions of the economy. Take, for example, the governor of New York or the governor of California who's facing a growing recall movement.
Or take the governor of New Mexico, who in mid-December issued another shutdown order as to all elective surgeries.
I strongly think that what we're going to see in the future is management by politicians who believe that business can be turned off and instantly restarted; that the economy works like a light switch. It just isn’t so. Anybody who's been in business knows that.
What should medical group leaders do? What should facility leaders do?
Begin with designing a flexible staffing program.
You are going to have to seriously address the issue of how you are going to lay off and
who gets laid off. You are going to have to look at revising services agreements that foolishly promise people an “equal share of the work” when there be may not be enough work to
go around.
You are going to have to prepare for paying rent when there is no income. Be prepared soon to renegotiate leases to address the fact that there will be there will be reoccurring events where there is no income and for which there should be forbearance.
That, my friends, is the "new normal".
Bad flu season: Shut them down!
Kids with measles: Shut them down!
Most of you (well some of you) might not like to hear this, and maybe I’m wrong.
But while you can hope for the best, you should understand that the worst might occur. Taking that into consideration is the smartest move.
This coming new normal is already impacting the value of your business.
For example, right now, unless you are strategically postured in a way that makes you a unicorn, and frankly there aren't that many unicorns, the value of ASCs has dropped 25 to 50 percent, if not more, as viewed by any buyer who has ever gone through a truly bad economic time. The same is true as to the value of professional practices.
As a result, you need to adjust expectations among owners concerning distributions, concerning valuations, and concerning getting out, at least as to a majority interest, before valuations dip further, which they will.
No one with a brain is going to put credence on your past three years of performance. No one with a brain is even going to look at 2020 as indicative of the future. Instead, they'll look at April through October (or perhaps December) and then project that the same, or worse, will repeat year-after-year into the future.
Yes, hope that everything is going to work out fine. But plan for the worst possible case. Do your structuring. Do the psychological work with your partners and with your staff so that they're prepared if it doesn't turn out all rainbows and unicorns.
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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 Discarding Democracy Improves Your Group’s Chances of Success – Medical Group Minute – Redux
Watch the video here, or just keep reading below for a slightly polished transcript:
There’s an important reason why physician groups must do away with overly democratic or consensus style systems of governance: Those approaches make it impossible for the group to adopt a strategic, as opposed to a tactical, outlook.
Take a consensus style group that is unable to come to terms in respect of the expanded office hours demanded by a large number of referring physicians in the community. From a purely tactical standpoint, the group ventures into the question of the cost of the extra hours of operation and, although unspoken, of the convenience factor as run through each doctor’s personal filter.
But the strategic analysis is very different: If we value their referrals, how do continue to obtain the ongoing business of the physicians in our community who are already referring to us? This, of course, requires an understanding of the concept of lifetime value.
As to the question of who should be making that decision, true democracy doesn’t work in business any more than it works in running a city, state or nation. As I advise clients, I’m a strong proponent of the “strong leader” form of governance. Whether that leader is grandfathered in or elected every year or two is an issue that turns on the culture of the specific group. If elections are the culture, that’s where democracy comes into play: representative democracy.
Leaders must be empowered to lead. Not all of their decisions will be good ones, so they must be free to fail as well as to succeed. Requiring a group vote or establishing a board consisting of all of the shareholders guts leadership and replaces it with its poor relation, consensus, which by nature suffers from the defects of peer pressure and compromise.
Lead, follow or get out of the way. Or, as the English author G.K. Chesterton poetically put it, “I’ve searched all the parks in all the cities and found no statues of committees.”
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| | | Listen to the podcast here, or just keep reading for the transcript.
Is an MSO right for me? How about a CIN?
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 MSO (a management services organization), an IPA (an independent practice association), an RBMG (a sort-of cousin to an IPA), a CIN (a clinically integrated network), and so on.
In our metaphor, none of them are 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 ends.
But the real takeaway for you 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 an MSO.
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.
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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 Free.
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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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