ADVISORY e-ALERT     July 29, 2011 
Advisory Law Group, a Professional Corporation








Your hospital opens a new clinic directed solely at charity care and almost overnight 25% of your hospital-based practice becomes no pay.


Your hospital announces that it's bringing in a new cardiac surgery group and that it's controlled foundation will no longer be referring patients to you.


Your office-based practice focuses on workers comp; changes in the fee schedule for dispensing pharmaceuticals to your patients guts $100,000 a month of pure profit.


These may or may not be real issues for your practice, but each one, and scores more, both similar and dissimilar, but impacted my clients over the years. 


What changes are in store for you?


As Nels Bohr, Nobel laureate said, prediction is very difficult, especially about the future.


But just because it's difficult doesn't excuse you from attempting to do it, from attempting to protect your profits and guard against significant business setbacks.


A Bit of Background


I've written in earlier issues of the Advisory e-Alert about the important distinction between planning and strategic thinking.


Planning suffers from the initial defect that it is based entirely on an extrapolation from the present. This differs from strategic thinking which is based on envisioning a future and then designing the strategies and tactics to, in essence, have that future pull you toward its accomplishment.


Planning's second major defect is that it is based on the inherent assumption that the foundational facts underlying the plan will remain the same. For example, that the hospital will never close, that the payor mix cannot change overnight, or that regulations won't instantly gut $1.2 million from this year's bottom line.


But life isn't that simple, and scenarios such as, and very different from, those cited above happen and must be included in the development of your group's overall business strategy.


Low probability but high impact


In essence, a Scenario Survey involves identifying as many possible scenarios, that is, as many possible "worlds," of the future, as possible. It's a hunt for your own black swans: events that, no matter how low their probability of occurrence, pack the potential for high impact.


For example, for a hospital-based group doing business at only one facility, the odds that the facility will be physically destroyed by a natural disaster are low, but the impact of that event would be disastrous to your practice.


The purpose of the Scenario Survey is not to simply indentify scenarios or to judge the odds that they might occur and to estimate the damage that would result. No matter how well one is at playing this game, it would be impossible to identify all of the possibilities, to assign probabilities to their occurrence, to value their impact and, therefore to assign a meaningful valuation to the risk.


Instead, the purpose is to identify classes of underlying trends, issues and questions and then to assess the development of group strategy so that it remains valid in as many possible future classes as possible.


The more scenarios a strategy would survive in, the more robust that strategy is, and, therefore, the more likely that the strategy will serve you well. Alternatively, a strategy that survives only in one possible future, the more fragile and prone to failure it likely will be.


The Scenario Survey is a valuable tool in the development of group strategy. Its use strengthens strategy and therefore strengthens the odds of your group's success.


Call or email me now, to get started because it's almost too late.




Medical Practice IS Becoming More Commoditized:  Do You Comply Or Do You Thrive?




All Things Personal


Recently, I was speaking with a client who called in on his cell phone.  I could hear traffic in the background.


Three to four minutes into the conversation, the client blurted out, "it's the police; got to go," and hung up the phone.


A half-hour or so later, he called back and explained that he had been pulled over for talking on his cell phone without a hands-free device, a traffic violation in his state.


Yet that same day, I had heard of the recent study by the Governors' Highway Safety Association which found that there is no conclusive evidence on whether hands-free cell phone use while driving is less risky than hand-held use.


But wait, as my client now knows well, nine states, the District of Columbia and the U.S. Virgin Islands all have laws prohibiting driving while using a cell phone without a hands-free device.


It appears as if these laws may belong to the class of reactive laws:  laws quickly passed in response to some significant event. 


Whether passed for their public relations value or some shared psychological urge to "do something," these laws are often promoted as necessary by politicians who are more than happy to take advantage of a bad set of circumstances to project the image of speedy leadership. 


So speedy in fact that, like a cockroach, they go from zero to full speed ahead, that is, passage, without the necessity of any thinking in between.  The result, of course, is that reactive laws are often ineffective or even counter productive.


Unfortunately, the same thing holds true in respect of policies and procedures that hospital administrators, and sometimes even your own colleagues, wish to mandate in reaction to events at the hospital or within your practice. 


For example, actual compliance requirements are valid, but the dozens, if not hundreds, of meaningless, paperwork producing, time sucking requirements imposed on physicians today do little to correct problems and a lot to reduce time available for patient care. 


Before you sign off on, decide not to fight, or even propose a new policy, ask if there really is any relationship between the proposed policy and the prevention of further events? Is another policy, or no policy, preferable?  What are the likely secondary, tertiary or even quaternary results of the proposed policy?


We don't live in a perfect world and meaningless rules won't make it any more perfect.  They may make you feel better though, at least for a while.  And isn't that what those rules are really all about?




Fair Market Valuation:  The Death Spiral of Physician Compensation, published in the July 2011 issue of Anesthesiolgy News.


Other versions of that article appear:


  --  As "Fair's" Not Fair In The Game of Doc's Pay in the July 2011 issue of General Surgery News.


  --  As Fair's Not Fair: Fair Market Valuation and the Death Spiral Of Physician Compensation in The July 2011 issue of Pain Medicine News.


The Company Model of Anesthesia Services: Will Less Money Lead to Jail Time?, a republished version of The Company Model: Is Taking Less Money To Work at a Surgicenter Worth Jail Time?, appears in the July 13, 2011 issue of Becker's ASC Review.


To read other recent articles, click here.



Want to read past issues?

Did you delete (by mistake, of course!) a past issue of Advisory e-Alert and want another copy?

No matter the reason why, back issues of Advisory e-Alert are available from the archive.  Click here.


ADVISORY LAW GROUP, a Professional Corporation

Tel:  800-488-8014 or 310-843-2800
Fax:  877-883-0099

10940 Wilshire Blvd, 16th FL
Los Angeles, CA  90024

1227 De La Vina St
Santa Barbara, CA  93101

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.   
2011 Advisory Law Group, All Rights Reserved


Subscribe to the e-Alert 


Let Us Know What Business/Legal Issues You'd Like to See Addressed in A Future Issue
Warning Sign
In This Issue
The Scenario Survey Process
Videocast: Commoditization - Do You Comply Or Do You Thrive?
All Things Personal
Recently Published Articles
The e-Alert Archive
Podcast Now On iTunes
2011 Anesthesia and Radiology Business Updates Now Available
The Wisdom. Applied. Blog
Q & A Video Series
The Immediate Leader Experience
Mentor Program

 Follow Us On Twitter -





Listen and subscribe to Mark's podcast series, Wisdom. Applied., now on iTunes.










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.
Follow this link to the
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.