ADVISORY e-ALERT     May 10, 2011 
 
Advisory Law Group, a Professional Corporation

 
                                     


HOSPITAL CONTRACT NEGOTIATIONS:  ARE YOUR STRAGGLERS BEING PICKED OFF?

 


Midday on the Serengeti, the cheetah softly approaches the herd of gazelle.  She stops and waits.  She watches the gazelles' movements, sighting an older straggler here, a younger one there. 
  
Sensing her approach, the herd begins to run.  Quickly springing forward, the cheetah aims for the older, slower gazelle closest to her -- within 15 to 20 seconds, the gazelle will be brought down or the cheetah will abruptly end the chase and search for other prey.
  
Midday at St. John's Community Hospital, the CEO, Jonathan Crump, leans back in his chair and ponders the roster of your group's shareholders.  Slowly his eyes move down the page to the name "Dr. Smith," who's been with the group for 30 years, never in a position of leadership.  He circles it with a red pencil.
  
Moving further down on the list, he does the same for "Dr. Jones," who's been with the group for four years, a shareholder for the past two.
  
Picking up his phone, Crump tells his assistant, "Please set up two appointments.  I'd like to meet with Dr. Smith sometime Tuesday afternoon and with Dr. Jones on Thursday or Friday."
  
Three weeks later, you're chairing the meeting of your group's shareholders, discussing strategy in connection with the upcoming exclusive contract negotiations.
  
Dr. Smith, who rarely speaks up at group meetings, cautions that the group shouldn't push so hard on the amount of stipend support because he's heard that the hospital's been receiving lots of inquiries from other groups.  Smith's quiet for the rest of the meeting, but he is taking a lot of notes.
  
Dr. Jones mentions that he's heard that the hospital has serious questions about the group's leadership and that it might affect the group's ability to get the contract.
  
Jonathan Crump may be a hospital CEO, but at heart, he's a hardball negotiator with a cheetah's ability to stalk his prey.
  
And now he's created two double agents.  One is afraid that he'll lose his position in the department and be considered too old by other potential employers regardless of the
niceties of age discrimination laws.  The other is being stroked with smiles and pats on the back and visions of his future as tomorrow's leader.
  
The road to hospital-based group hell is truly paved with your own group members' emotions.
  
Hospital based groups rarely, if ever, lose their exclusive contracts due to poor medical performance.  Instead, it's usually a political move or a financial one. 
  
Importantly, the political issues which infect a group's contractual relationship with the hospital are often internal group issues as opposed to political attacks from physicians within other medical staff departments.  But of those internal group issues, they could be true intergroup issues or seeded ones. 
  
The first category would include a disgruntled group member who runs to the hospital CEO to complain about the group's compensation plan, thinking he can get the CEO to force better terms from the group -- the disgruntled member usually finds that he, just like everyone else in the group, soon ends up looking for a new job. 
  
The second category includes a "seeded" issue, like those of Drs. Smith and Jones, whose neediness (one to remain employed and the other to become a leader) is a weapon in the hands of a CEO seeking to cause dissension within your group in order to obtain an advantage in negotiations, or even worse, to get rid of the group completely.
  
Many groups focus their exclusive contracting negotiations outward.  Of course, that's required.  But don't forget to focus inward as well.
  
Just as negotiation with the hospital takes place over an extended period of time - the entire course of your current contract term - so does the strategy in respect of your group's structure and members, including that in respect of guarding the herd against predators, like your Mr. Crump. 
  
Contact Mark F. Weiss to begin the process.
  
 
 
_____________________________________________
  
The Fair Market Valuation Death Spiral
  

 

visit www.advisorylawgroup.com/videos.html 

 
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All Things Personal

 

Remember back to when you were in elementary school.  Chances are that you may remember a little boy, let's call him Little Johnny, who always pushed and shoved to get to the front of a line or maybe even lied, and certainly cheated, to get his way.

 

Well, flash forward several decades, through medical school and residency.  Little Johnny is now one of your colleagues on the medical staff.  Do you really expect him to act much differently than when we was 10?  It would be foolish to assume that his personality has really changed.

 

In my practice, I see these Little Johnnys act out in various ways.  They use the medical staff to torpedo competing physicians.  They spread rumors here and there to advance their positions and those of whom they favor.

 

Unfortunately, to the extent that Little Johnnys work inside the peer review process, both federal law (the Health Care Quality Improvement Act) and counterpart state laws provide immunity.

 

But even so, immunity is not always complete and, in keeping with their personalities, Little Johnnys generally can't contain the scope of their pranks to the peer review process.  That's when legal options such as suits for defamation and interference with economic advantage come into play.  It's also when complaints back to the medical staff for disruptive behavior can be used to turn the tables on your Little Johnny.

 

If you didn't punch back at Little Johnny in the 5th grade, take the opportunity to do it now. 

 

RECENTLY PUBLISHED ARTICLES

 

How to Navigate The Tide of Aggressive RFPs, published in the April 2011 issue of Anesthesiology News.

Harnessing the Effects of Group Pressure In Hospital Negotiations: Find Your Buddy, originally published in Anesthesiology News, was reprinted in the April 2011 issue of Pain Medicine News. 

 

To read other recent articles, click here.




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ADVISORY LAW GROUP, a Professional Corporation

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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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In This Issue
Are Your Stragglers Being Picked Off?
Videocast: The FMV Death Sprial
All Things Personal
Recently Published Articles
The e-Alert Archive
2011 Anesthesia Business Update Now Available
Q & A Video Series
The Immediate Leader Experience
Mentor Program
The Wisdom. Applied. Blog
 

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2011 ANESTHESIA BUSINESS UPDATE NOW AVAILABLE FOR DOWNLOAD


 

 

Whether you're an anesthesiologist or another hospital based or office based physician, there's tremendous value waiting for you in your complimentary copy of Advisory Law Group's 2011 Anesthesia Business Update.

Click on the image below to access the download page. 

2011 Anesthesia Business Update 
 


THE
Q & A VIDEO SERIES


 
 
Overhear Mark's responses to medical group strategy and business questions.
  
Follow this link to the Q & A video page.
 

 
 
 
THE IMMEDIATE LEADER EXPERIENCE™ 
 
 
 

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.

Or, you're the new leader of an existing group with complex practice and business operations -- you need to understand how to master the group's organizational, operational and leadership issues -- and you need to be brought up to speed immediately.
 
After having regularly dealt for many years with physicians in both of these contexts, we've designed a process to deliver immediate results: The Immediate Leader Experience™.
 
The Immediate Leader Experience™ takes place over a weekend in Santa Barbara, California and includes two nights accommodation at the Four Seasons Santa Barbara Biltmore Hotel. 
 
In two short days, you'll be entirely up to speed, totally prepared and confident.  You'll be armed with tools and sample documents.
 
Due to the nature of this program, admission is upon interview only -- there is extremely limited availability.
 
For further information on The Immediate Leader Experience™ follow this link.  
MENTOR PROGRAM 
For information on Mark's mentor program, click on the following link:  The Advisor Program.
 
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THE WISDOM. APPLIED. BLOG
Follow this link to Mark's blog, Wisdom. Applied.
 
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