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| Dear Friend,
Is each partner an exception to the rule?
If you’re a longtime reader, you know that my view is that almost all of the instances of a medical group’s organization and operation are related . . . that either they are managed in order to achieve success or they are treated silo-like (or even ignored), resulting in stagnation and failure.
In an educational setting (not a client engagement), I was asked whether a physician member of a group, a partner, could opt out of a new managed care agreement being entered into by the group. I was told that the carrier didn’t care if he did.
I found the question to be rather funny. The real question is not one of managed care contracting; after all the affected carrier consented. Rather, the real question is whether the group cares that it is slowly ceasing to be a group.
Letting each partner write his or her terms of partnership is not a long term strategy for success, it’s a short term strategy for failure.
Maybe your group thinks the partner’s question was funny, too. But ask yourself how many other “special deals” or “it’s just this once” you’ve let your partners cut, or, worse yet, the group has cut for them.
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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 – What a $12 Million Stuffed Shark Can Teach You About Increasing Value and Profits – Success in Motion Watch Tuesday's video here, or just keep reading below for a revised transcript:
I’ve been reading a book called “The $12 Million Stuffed Shark.” The author is Don Thompson, and it's about the curious economics of the contemporary art world.
I like collecting art. Most of what I have is California plein air painting, some of it from the 1940s and some of it more recent. I know next to nothing about contemporary art. I didn’t even know what the definition of “contemporary art” is. I learned from the book that there’s no single definition of contemporary art, but a working definition would be “art produced by artists after 1970 up until the present.”
I’m only a few chapters in, but already I see the parallels between the art world, my practice, and your practice.
And that’s the question of how do you sell?
Damien Hirst, a famous British artist, was initially commissioned by Charles Saatchi, an ad guy who is fabulously wealthy, to produce the stuffed shark (which I’ll tell you about in a moment) for a price of 50,000 British pounds, which at the time was $75,000 to $85,000.
Hirst bought the shark from a fisherman off the coast of Australia, had it taxidermied and suspended in a large case so that it looks like it's swimming in water. The effect is that, in a gallery, one might think there is a very large shark with its mouth open cruising the gallery floor looking for its next meal. (The piece is titled “The Physical Impossibility of Death in the Mind of Someone Living.")
That piece was then sold several years later by Saatchi, reportedly for $12 million.
How can a shark that is stuffed by a taxidermist and held up by strings in formaldehyde solution become a work of art? And how can it sell for $12 million?
How can, in another example discussed in the book, a pile of blue and white candy sitting in the corner of a room, be "art" valued in the millions?
The answer is simple: Those who drive the contemporary art market consider those works to be art and they price it accordingly. Who are these drivers? They're chiefly a small handful of influential gallery owners and museums, which show "art" and thus give it the provenance and pedigree that means that it’s “art," and a small number of collectors who are willing to buy based on the provenance created by the galleries and museums. That provenance gives the collectors comfort that what they are buying is art and that it is valuable.
Those who are interested in purchasing at this level this don’t have the skill to judge what is art and what isn’t, so they look for other cues. They look for branding. The handful of influential galleries and museums provide that branding. By buying, the collectors themselves become branded: A work once owned by Charles Saatchi is more valuable because it was once owned by Charles Saatchi. For example, the $75,000 "shark" that re-sells for $12 million.
You find very wealthy branded collectors, branded galleries, and branded museums.
The same concept can be applied in a professional practice to the patient relationship, to the referral relationship, and, in some cases, to actual pricing.
What drives the assurance that you’re going to treat the patient right? What drives the assurance that you’ll treat your referral sources right? What drives the willingness of some to pay completely outside of the "usual" stream of government reimbursement and in-network coverage?
I’m not talking about quality, but, rather, the value as perceived by the customer, that is, by the patient or referral source or facility. You see the same thing in a supermarket, where Coca-Cola sells for a multiple of the price of store brand cola.
Think what you can do in your business or practice to mirror the lesson of that $12 million shark. What image, what assurance, what provenance can you create for your patients and other customers that cements their decision to do business with you and to refer to you?
I suggest you buy the book, “The $12 Million Stuffed Shark.” It will teach you something about contemporary art. And, it may teach you something about how you can use the same concepts that make a dead fish worth a fortune.
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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.
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•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.
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•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? Merged Hospitals Don't deliver Higher Quality! – Medical Group Minute
Watch the video here, or just keep reading below for a slightly polished transcript:
At first, I thought it was a joke.
The healthcare world was supposedly abuzz last week when the New England Journal of Medicine published (on Jan 2, 2020) the report of a study that shows that consolidation in the hospital industry doesn’t lead to higher patient satisfaction or to higher quality.
Gee, who woulda thunk it?
After all, we know that if we want a high quality meal, we don’t go to a 10 table Michelin starred restaurant, we go to a very large and efficient joint, like McDonald’s. Oh, we don’t do that?
Despite what hospitals argue when they’re looking for regulatory and political support, they don’t merge to create quality: They merge to reduce competition and to raise prices.
But mostly they merge because the hospital industry is in chaos.
The number of hospital closures and bankruptcies continues to climb. The percentage of cases flowing out of hospitals to physician-owned, freestanding facilities continues to grow.
As a result, hospitals cling together for survival like B-list actors in a low budget horror movie.
Here are the real lessons for you:
1. Don’t go into the hospital business.
2. Be very wary of allowing a hospital into any physician venture.
3. Don’t hire a hospital administrator to run your physician-owned ASC or other facility (which is another way of looking at point #2).
4. Focus on why the hospital business is in disarray: It no longer has a compelling business model.
And, then, with your free time, consider becoming my collaborator on a research grant request. We’ll study why anyone would perform a study to see if hospital mergers lead to higher quality. Apparently, there’s a lot of money available for this kind of stuff and there’s no reason why we shouldn’t try to get our fair share.
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| | Thursday – Free $10.6 Million Dollar Lesson On How Not To Fire Physicians – Podcast |
| Listen to the podcast here, or just keep reading for the transcript.
Here, courtesy of Tenet Healthcare and two terminated cardiologists, is a lesson about firing physicians . . . and, when not to.
In 2018, cardiologists Amir Kaki, M.D. and Mahir Elder, M.D. were terminated from leadership positions at Detroit Medical Center hospitals and, as a result lost their medical staff privileges.
In an award that became public earlier this month, an arbitrator agreed with the physicians’ claims that Tenet Healthcare, DMC’s parent, acted with malice in terminating them and discontinuing their medical staff privileges as retaliation for Drs. Kaki and Elder raising quality of care and improper billing concerns. The arbitrator awarded $10.6 million in damages and ordered that their medical staff privileges be reinstated. In addition, the award included $624,000 in attorneys’ fees as well as discovery abuse sanctions of $110,000 against Tenet.
The doctors’ lawyer is seeking court affirmation of the award and, as might be expected, Tenet announced that it will seek to vacate the arbitrator’s ruling.
Although the story is certainly interesting on its own accord, it presents lessons for employers, whether they be facilities or medical groups.
It’s certainly not unheard of for healthcare employers to terminate physicians as a result of their advocacy for patient care or their other compliance/quality of care complaints.
And, it’s certainly not unheard of for fired physicians to claim that their termination resulted from such advocacy when it actually didn’t, or even that there was advocacy when there wasn’t.
Here are some takeaways:
1. Employers must be diligent in implementing their compliance programs and in their overall efforts to take seriously any complaint concerning unsafe medical practices. Complaints and demands must be documented and they must be investigated to the level appropriate under the circumstances. Depending on the circumstances, for example a complaint by a physician that new equipment or supplies are required, the physician making the complaint should be kept apprised of the process and, even included in it. Fully vetting complaints and demands takes some, even if not all, of the sting out of a later claim that the complaining physician was fired to hide the complaint.
2. I thought about not including this because of obviousness, but I changed my mind: Don’t fire the messenger. And, even if that’s not the reason for the termination, remember that bad timing will almost always cut against you.
3. Disruptive physicians are wont to claim that their termination for cause was actually termination in retaliation for valid patient advocacy or as a result of some other improper motive. Employers must carefully screen out potentially disruptive job candidates. If it’s too late and they’re already employed, don’t bend over backwards to “fix” them, allowing them time to “fix” you.
4. Be careful to preserve corporate or other entity structure. Although it’s unclear from the story reporting the award against Tenet, I assume that there are multiple entities in-between the parent company and the facilities that employed, and granted staff privileges to, the two doctors. Follow required entity formalities in order to compartmentalize liability.
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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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