ADVISORY e-ALERT     July 21, 2009
Advisory Law Group, a Professional Corporation
"Psst, I've got a deal for you.  Want to work harder, but for the same money?"
If I asked you that, you'd look at me as if I were nuts.
But, chances are, if you're a physician in a hospital-based group, your group has jumped to accept that same deal, perhaps even more than once. 
A classic example is the situation in which a hospital seeks to expand its O.B. service line from the current level of a handful of deliveries each week, even though its market is such that the expectant mothers are likely to be heavily from the Medicaid population.  The hospital "asks" (you can read this as "demands") its anesthesia group to provide 24/7 in-house coverage in order to attract obstetricians to use the facility.  The group is now faced, at a minimum, with having one of its physicians stay overnight in the hospital, when he or she might be doing only a few cases a week and generating very few dollars. 
Yet groups often agree to these demands due to the mistaken belief that voluntarily providing more services will endear the group to the hospital's administration. 
Although I counsel that hospital-based groups need to create unique experiences for their referral sources, patients and hospitals (see my article on creating an experience monopoly, they should not take on new coverage obligations without a concomitant financial reward.  If sufficient reward does not come from patient services, it must come from the hospital. 
Failing to obtain a quid pro quo leads to two unfavorable results:
1.  The group works harder for the same money, destroying morale and making it harder to recruit and retain.
2.  The group creates a new, coverage/stipend status quo level in the mind of administration.  In other words, if the hospital later adds additional service requirements, the entire preexisting level of both compensated and uncompensated services will be thought of by the hospital as the baseline for discussing new financial support.  This is simply another factor in a widening Workload-Reimbursement Gap™ that further exacerbates the inability to recruit and retain.
Groups must be proactive in defending against any variant of what I've described here as the O.B. coverage scenario (note that the situation is the same for any hospital-based group, the specific type of increased service demanded is not what is important ... the fact that there's an increase is).  This requires a coordinated strategy in respect of many elements of the group's operations.  Among other things, the group must be vigilant in defending its workload obligations, and it must work, in advance, to gather data, and frame the issues, to support higher end fair market valuations. 



In the course of speaking to residents I'm often queried as to what questions they should ask when on an interview. 

Of course, they're interested in knowing things like how much they will be paid, what's the work schedule generally like, and what the call obligations are.  But they rarely think of asking the basic question, one so basic that not only every resident and other prospective physician employee or subcontractor should ask, but one with which every member of every medical group should be concerned:  Does this medical group have a future? 
Here are a few of the specific questions I tell the residents to ask to ferret out the true state of affairs: 
1.  Can you tell me where the group sees itself being in five years? 

2.  Is there someone, not a committee, in charge?

3.  Does the group have a strategic plan?
4.  How often is it updated?

5.  Is there someone in the group's leadership who manages the plan?  May I speak with him or her?

6.  Are there substrategies in place for each area of the group's business and are they coordinated with the group's overall business strategy?  What are some of the substrategic areas that the group has focused on?

7.  Does the group coordinate its tactics with its strategy?  Can you give me some examples?

8.  (If the group is hospital-based)  Do you have an exclusive contract?  If so, how long have you held it?  How long does it run?  What leverage have you created to help assure its continuation?  What leverage have you created to help assure the group's continued existence in the event the exclusive contract is terminated?
These are just a few of the questions you should be asking yourself.  Once they and the others are asked, one question still remains:  
If your group does not have a future, what are you doing to change its circumstances . . . or your own?



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The materials presented in this Advisory e-Alert are educational only and are neither legal advice nor a substitute for it. Advisory e-Alert presents a general discussion which may or may not apply to your particular legal or factual circumstances. The distribution of Advisory e-Alert is not intended to create, nor does it create, an attorney-client relationship. Please do not send us confidential information without receiving explicit authorization from Advisory Law Group to do so. Do not take or avoid taking any action as a result of the materials presented in this e-Alert without first obtaining legal counsel.   
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Work More. Less Money.
Does Your Medical Group Have A Future?
Videocast: 6 Golden Rules
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You're a physician who wants to form a medical group and, among other things, subcontract with or employ other physicians, enter into exclusive contacts, obtain significant stipend support money, create related entities to increase protection and the like. And you want to come up to speed on all of this immediately.

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