ADVISORY e-ALERT     June 30, 2011 
Advisory Law Group, a Professional Corporation




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, thereby dooming it to mediocrity.
Take, for example, 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 we continue to obtain the ongoing business of the physicians in our community who are already referring to us?  This, of course, requires an appreciation 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.  Neither do structured consensus based governance systems.  They are inefficient.  They cause delay and in some cases result in decision making paralysis.  They include the "opinion" of those lacking any real basis for developing one.  They create watered down solutions.
As I tell 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.
As the American Revolutionary era writer and political pamphleteer Thomas Paine stated, lead, follow or get out of the way.
Or, more poetically (courtesy of the English author G.K. Chesterton):  I've searched all the parks in all the cities, and found no statues of committees.
Call or email me to discuss tuning up your group's governance structure.
Further Reading:  A few years ago, I wrote two articles on physician group governance, both available on the ALG website, one for, a radiology publication,, and the other for Anesthesiology News,

DiscussThisPhone Forum on Group Governance
As a new, complimentary resource, I'll be hosting a DiscussThisPhone Forum on Wednesday, July 13th from 3:00 p.m. to 3:45 p.m. PDT to explore issues of group governance. 
Note that the phone line will be open and recorded; it's an educational discussion, not legal advice. 
Send an email to by July 11th to reserve your spot (attendance limited) and obtain the dial in information.
How To Survive The Changing Market For Hospital-Based Services




All Things Personal


My son, home from college for a week, ordered a new computer with an extended warranty from HP. They're having a student special - the price includes a new X-Box.


When placing the order, he opted to have it shipped to our home in Santa Barbara.  The next day he followed an email link from HP to check on order status.  The X-Box and the warranty information had already been shipped but the computer won't arrive at the family home until after he returns to school in San Diego for summer classes.


He called HP to change the shipping address for the computer and was told that because the X-Box and warranty information had already been placed en route to the Santa Barbara home address it was impossible to change the address for shipping the computer.  Of course, they told him, he could cancel the order, return the warranty and the X-Box at his expense and place a new order.


Can you imagine a more moronic business policy?  They're in the computer business and they lack the ability to change the address for shipping a computer that won't be manufactured for another week!  Or perhaps, even worse, they have the ability but not the will.


Does your group or practice suffer from some sort of business policy stupidity?  I have a convenient tool for you to use in pondering this question:  Ask how you would compete against yourself.


Call, or get a friend to call, your own office or the billing service that you use; how easy is it to reach someone and are they helpful?  Pretend you're a patient or a prospective one; are their barriers to making an appointment?  Think about how are referring physicians' requests are handled.  These are just a few the questions that this game entails.  How far do you fall short of expectations?  How would someone use your shortcomings to compete with you?


The fix is simple:  Just start competing with yourself. 





The Pitfalls of Fair Market Valuation, published on on June 3, 2011.
 To read other recent articles, click here.



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ADVISORY LAW GROUP, a Professional Corporation

Tel:  800-488-8014 or 310-843-2800
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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
Discarding Democracy
DiscussThis Phone Forum on Group Governance
Videocast: How To Survive The Changing Market For Hospital-Based Services
All Things Personal
Recently Published Articles
The e-Alert Archive
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2011 Anesthesia and Radiology Business Updates Now Available
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Q & A Video Series
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Whether you're an anesthesiologist, a radiologist 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 and 2011 Radiology Business Updates.

Click on the images below to access the download page. 

2011 Anesthesia Business Update 

2011 ALG Radiology Business Update

Follow this link to Mark's blog, Wisdom. Applied.


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


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.  
For information on Mark's mentor program, click on the following link:  The Advisor Program.
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