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| Dear Friend,
Providing coverage for a closed facility is easy. But not a good way to make a living.
We used to joke about the name of Midway Hospital, an acute care hospital in L.A., saying that it was midway between life and death.
An anesthesiologist, commenting on my theme that inpatient care is becoming outpatient care and that the center of outpatient care isn’t the hospital but the freestanding facility, in his case the ASC, told me that I was missing an element in the analysis.
Specifically, he argued that it is far more efficient and profitable to schedule coverage for a hospital, with its large number of operating rooms running for long hours each day, than it is to schedule for outlying surgery centers running a few rooms for part of a day.
He’s right. But only until the hospital loses so many cases that it doesn’t pay to cover it. Or, until the hospital closes.
Let’s get back to Midway. “Born” in 1040s, by the 1980s it was a part of Summit Health. In the early 1990s, Summit sold the hospital to OrNda Healthcorp which, in turn, became part of Tenet Healthcare. By the mid-2000s, Tenet sold the facility to a physician-led venture, Physicians of Midway. Perhaps seeing the irony in the Midway name, Midway became Olympia Medical Center. On December 31, 2013, Alecto Healthcare purchased the hospital.
And then, 7 years later to the day, December 31, 2020, Alecto announced the hospital’s shutdown, to be effective March 31, 2021. Midway was no longer midway between life
and death.
UCLA Health has announced that it purchased the property, which is still scheduled for closure at the end of March. If and and when it will reopen, and as what, is unknown.
I suppose that it is easier to schedule for zero rooms at what was once a hospital than it is for 5 or 10 ASCs located all over the place. But it’s not very effective, at least if you’re running
a business.
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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:
I want to talk with you today about avoiding the Audi problem.
I read in The Financial Times that Audi, a unit of Volkswagen Group, is shutting down some factories and laying off workers because of the inability to obtain the computer chips necessary to build components that go into their cars. The chip shortage is apparently affecting other manufacturers as well.
So, let's talk about supply chains and medical groups.
Certainly, medical facilities have actual supply chains in terms of the expendable items they use. But so, too, do many physician groups.
For example, an anesthesia drug shortage might impact all surgeries, adversely affecting not only the ability of anesthesiologists to earn a living, but of surgeons and others, as well.
But we could take this another step. We could look at medical groups and their staff as a supply chain.
What can you do to make sure that you are covered, in terms of staffing?
Take, for example, a radiology group of 25 radiologists. What happens if five radiologists leave all at the same time? Now certainly, if those five radiologists are all nearing retirement age, you can do things within your operating agreement or similar document to put some restrictions on the timing of the number of retirements. But you may not be able to do that if we are simply talking about employees.
So, what can you do, what should your thinking entail, in terms of attempting to avoid those supply chain issues?
You can have a program of recruiting, even when you do not necessarily need to hire someone. In other words, you can maintain contacts with individuals who might be interested in joining your group if and when there's an opening.
You can also use the way that you document agreements to build in "services supply chain" support. For example, you can have employment agreements that have long, without cause termination provisions.
But remember, even if you document everything properly, even if you have an agreement that's 4 inches thick, if you are not willing to enforce it, it's nearly useless. In other words, if you are not going to spend the money and time and effort required to enforce agreements, then you might as well not have one to begin with.
Spend some time thinking about what kind of things, if there were to be a shortage of them, would impact your ability to operate. What you can do ahead of time to try to prevent a shortage and to lesson the impact on your business if one occurs?
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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 - What Can the Owner of a Plumbing Company Teach Medical Group Leaders? - Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
A few years ago I met a "plumber; " he had taken over his father's small company with a few trucks. Over the course of less than a decade, he built it into a statewide service with hundreds of technicians and was expanding into the two neighboring states.
I asked him, we'll call him Chris, how he found enough qualified plumbers to expand
so rapidly?
He told me that he didn't especially look for trained personnel – he hired employees for attitude and taught them to be plumbers. He knew that his business was largely commoditized and found that the way out for his business was to provide a complete experience to his customers. His edge – tidy, polite, clean plumbers.
Hiring for skill is not even half the battle for your group – the price of admission. To set your group up to break free of the commodity trap, and to prevent your group from crumbling from within, hire for more than medical expertise.
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| | | Listen to the podcast here, or just keep reading for the transcript.
There’s lots of advice out there suggesting single track “cures” to the cash crunch that many medical groups and facilities are experiencing as a result of the coronavirus economic crisis. Unfortunately for the victims, many cures are being touted by those with knowledge, even extreme knowledge, about one solution, one recipe. Or, in some cases, simply part of the recipe. Take for example advice concerning valuation, offered up as the solution to the decline in income in the context of an existing coverage stipend arrangement. Yes, it’s entirely true that modeling valuation, that is fair market value, is an important element of renegotiating stipend support. But the bigger set of issues includes, but is no means limited to, questions such as should you renegotiate, which of many renegotiation strategies should you adopt, what other alternatives are available, and will the solution to that short term problem ruin your long-term future, among many others. As I’ve said before (if you haven’t already watched them, watch Business in the Time of Coronavirus Part 1, Part 2, and Part 3), there are many tools, many solutions, to the financial crisis impacting groups and facilities. However, they must be considered extremely carefully and put into context, into your particular context, that is. And, consider that many solutions are simply short term solutions to long term problems, band aids on the entity equivalent of birth defects. They offer only short term relief so don’t confuse them for anything else and don’t ignore the need for further analysis and corrective action. Beware those with a single recipe. After all, knowing the recipe, even the world’s best recipe, for a tagine doesn’t makes you Moroccan. |
| | | 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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