ADVISORY e-ALERT     August 31, 2011 
Advisory Law Group, a Professional Corporation  




Someone wants your practice, your patients, and your profits. And they don't particularly want to pay for them.


Although the healthcare battle being reported in the popular press is over Obamacare, the more immediate battles in terms of your practice's survival concern fighting off two converging trends: The growth of so-called "national groups" that want your practice, and the vision of hospital-centric healthcare.


National Groups


So-called national groups are stepping up their competitive push in a growing range of physician specialties.


Although some of these groups are true integrated medical practices, many are simply staffing services masquerading as such, almost functioning as franchisers of healthcare services in the way of hamburgers.


And as in the case of the national hamburger chains, the same concerns of quality apply.


Certainly, many facilities, and many patients, will be content with national-chain quality just as they are at McDonald's which, after all, is hugely successful. Many providers will be content working for lower wages that are the key to these groups' ability to compete.


The battle then takes place at the fork in the road, one leading to further commoditization of healthcare with fungible providers, many of whom will be paraprofessionals, and the other leading to high quality, high touch medical care.


Hospital-Centric Healthcare


In the world of the future being designed in hospital board rooms and faculty lounges, healthcare relationships are seen as hospital-centric. In that vision, patients are no longer referred to the hospital; rather, the hospital becomes the hub in a wheel-like delivery system, with it directing patients to affiliated providers for care. That is, maybe to you, or maybe not.


On the payment side, this agenda manifests itself, for example, as bundled payments and as the ACO initiative.


On the delivery side the agenda includes employment of physicians by hospitals or by their related foundations.


The aspirations of national provider groups mesh with the short term elements of the plan for hospital-centric healthcare, a world in which patients are not aligned with physicians but are aligned with the hospital. That's because hospitals can use a relationship with a national group as an intermediary step in their plan for domination.


By contracting with a national group as a sole or preferred provider, a hospital can displace existing independent and local group providers or give those physicians little choice but to become employees of the national group at significantly lowered compensation.


Once compensation expectations are sufficiently reduced and once competition in the practice area is consolidated, the next step can be the hospital's decision to bring all practitioners within that specialty into the ranks of hospital employment, thus obviating the need for the national group. Or, the large group can be allowed to remain in place for the time being, to be pressured for growing concessions under continuing threat of being replaced.




If physicians do nothing, the default position will be increased displacement by these so-called national groups.


Unless a giant step backwards in terms of income and control is your idea of an ideal future, you must implement an ongoing program within your practice's structure to create intertwining relationships that cannot easily be broken or duplicated by the so-called national players. You also need to target, duplicate and deliver the several touted benefits on which national groups claim to compete.


Whether you can and will rise to this challenge will determine whether you will have any real equity in your practice or will be relegated to the position of an implementer, that is, a highly skilled technical worker, as opposed to a true professional.


Contact me today to start protecting your practice, your patients and your profits.




Not All Business is Business Worth Having

View Episode 32 of the Wisdom. Applied Videocast 




All Things Personal


My father must have seen the calculations displayed on my face as I picked up the pool stick and eyed the target ball.


As I lined up the shot, he asked what ball I was trying to put into which pocket.  I told him.  But, he asked, did I think about what the cue ball would do after it struck the target ball, and about where any other balls would end up?  No.

Pool balls to deals to contracts to termination, the issue of considering more than immediate consequences goes largely unaddressed.  

I've written before that risk is more than probability of occurrence, it's probability multiplied by impact.  

But as in pool, the impact is more than simply the first collision.


Over recent months I've seen hospital administrators cut existing hospital based groups and surgery practices in favor of promises of new coverage at far, far lower "cost" to the hospital.  Initial cost, that is.


The administrators never factored in the loss of their hospital's Medicare certification, the cost of taking profitable surgery programs off line for six months, the cost of the loss of their own jobs, and even the cost of human lives.

Proactively, understanding the importance of secondary and subsequent impacts can guide your group's internal decision making process. 


Even more significantly, it can be used as a part of the Propaganda Push™ that your group should be deploying as a regular part of its ongoing strategy in your dealings with facilities and other contracting partners.

Many wish that life were simple.  It's not.  So take advantage of it.



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.




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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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The Five Critical Steps To Protect Your Practice And Your Profits


Hospitals and so-called national groups are ready to poach your practice and your profits.  Unless you develop and implement a strategy to protect what you have created, let alone to expand from that base, your future will likely be as an employee of a commodity level practice.

Learn the five critical steps you must take now to control your own future, to protect your practice and to preserve your profits.


When: September 27, 2011

Time: 4:00 PM Pacific Time

Length: 45 minutes

Investment:  $279 Complimentary to e-Alert readers


Click here to register today!


Because you want to be better informed than your colleagues, you're invited to connect with us on Find us on Facebook Follow us on Twitter View our profile on LinkedIn Visit our blog View our videos on YouTube to receive advance notice of my newest releases of complimentary information.



Let Us Know What Business/Legal Issues You'd Like to See Addressed in A Future Issue
Warning Sign
In This Issue
Protect Your Practice
Videocast: Not All Business is Business Worth Having
All Things Personal
Recently Published Articles
The e-Alert Archive
2011 Anesthesia and Radiology Business Updates Now Available
The Wisdom. Applied. Blog
Q & A Video Series
The Immediate Leader Experience
Mentor Program





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.


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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.