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




Most, if not all, physician group leaders would say that protecting their practice from competitors involves looking outward, that is, toward other providers of their specialty services.


So, if we were talking about, for example, a radiology group or an anesthesia group, group leaders would commonly be thinking about protecting the group from another group in the local area, from across the county, or even from across the country, any of which might potentially seek to displace the leaders' group as the provider of services at its facilities. These days, group leaders would likely also be focusing on the national staffing services functioning as "national groups" who are on the prowl for opportunities nationwide.


As a result of that focus, group leaders who understand the issues would be doing all they could to create an experience monopoly for their group's patients, referral sources and facilities. And, they would be taking other action to create barriers to block entry into their market by those outside competitors.


To diagram this in a very simple fashion:




As much as this is extremely important, erecting this type of barrier does nothing to protect the group against a second category of extremely potent competitor. Let me use two examples from outside of healthcare to illustrate this second category of threat, the first example from national defense and the other from industry in general.   


The country can take great efforts to protect military secrets or even physical access to a military base by, among other things, erecting barriers, both physical and virtual, to outside intrusion. Similarly, industrial concerns spend countless millions of dollars protecting their essential trade secrets from competitors. But that's only part of the story, because as much as the military and industry have to be concerned about protecting their secrets from someone who's on the outside, they have to be equally concerned about guarding against espionage from someone who's already on the inside -- by someone who is thought to be "on the team."


Protecting against competition from within is a weak point for many medical groups. But the reality is that most groups don't fail because of competition from an outside competitor; they fail from within due to the actions of, and sometimes competition by, members of their own group who break off to directly compete with their former group or who facilitate an outside group's ability to displace it.




Protecting against competition from within requires much more effort and detail than most groups incorporate within their "owner," documents (their shareholders agreement or partnership agreement) and within their employment agreements and subcontractor agreements. Although in some states the direct approach to preventing competition, covenants not to compete, are unenforceable, the correct approach is to build a series of protective measures against competition around the relationship between the group and each of its physicians, whether owners or employees/subcontractors. You can conceive of these protective measures as spines or spears, as shown in the illustration below:




By adopting a wide range of protective measures, groups reduce, and if possible, prevent, competition from within, whether it's actual direct competition by group members or their facilitation of direct competition by a third party to whom those group members hand the key to the group's economic engine.


Focusing on threats from without is hardwired into most group leaders. Those leaders must be as diligent in focusing on threats from within, as well.



Thanks to all of you who provided the very positive input on the planned Entrepreneurial PhysicianTM program structured around what I'm calling Success CirclesTM!

If you haven't yet offered your input, and wish to do so (for which I would be very grateful), here's the outline of the planned program:

As I mentioned in the November issue of the e-Alert, the idea is to provide a coaching service different from my current offerings: the extremely intensive Immediate Leader ExperienceTM and the informal, solo approach of the Advisor Program. The Success CirclesTM would be cohorts of from 8 to 10 individuals, no more than two from any single medical group.

Centered in part around my expertise and intellectual property developed over the past 30 years, the Circles would be both mastermind groups and informal outside boards of advisors in respect of each participant's group. There'd be mutual assistance, idea sharing and, importantly, cross accountability.

The Circles would meet in person four times a year. The Circle members would also participate in four telephone conferences a year.

The pricing would be moderate, with a one time registration fee in the range of $15,000 to $20,000. There would be an initial assessment and intellectual property provided. Then, there would be a monthly fee, in the range of $1,800 to $2,500 a month, for ongoing participation.

To my knowledge, there is no program like this for physicians. It fills a gap, especially in light of the very professional "opposition" in the form of hospitals and health systems.

What do you think? Note that I am NOT asking anyone to sign up or to commit to anything. All I'd like is your thoughts on my plan.  My personal email is

Thank you.


Did You Miss This Common Hospital-Group Contracting Issue?     


View Episode 36 of the Wisdom. Applied Videocast 




An annual feature, here's the 2012 un-resolution list for physician practice leaders:

1. Stop believing that the hospital administrator is an actual friend.  It's "just business" and friendship is a tactic being used against you.

2. Never meet alone with top level hospital administrators; take advantage of psychological triggers to gain advantage. See
Harnessing the Effects of Group Pressure in Hospital Negotiations: Find Your Buddy and Countering Pressure in Face to Face Negotiation.

3. Stop devoting all of your professional energy to serving your patients and begin devoting energy to saving your practice.

4. Don't think simply on the tactical level - develop a grand strategy for your group, conform all of your other business strategies to it, and then deploy consistent tactics

Oh, and one regular resolution:  Resolve to have a very happy and successful New Year!



Physicians: Action Required to Thrive in Today's "WE" Society, published on on December 23, 2011.

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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Avoid The Loss of Your Practice in 2012:
An Introduction to the Practice Protector ProcessTM
2012 will bring an increase in medical group failures as hospitals and predatory national groups, facilitated by government regulators, continue their onslaught against traditional private practice.
Your future as written by them:  Employment as a fungible, commodity-based provider.
If you'd prefer writing your own future, take 30 minutes to learn about The Practice Protector Process, designed to help you preserve your practice, your patients and your profits.


When: January 11, 2012 

Time: 4:00 PM PST 

Length: 30 minutes

Complimentary for 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
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In This Issue
Does Your Group Make This Mistake Concerning Competition?
Thank You For Your Input - Would You Chime In, Too?
Videocast: Did You Miss This Common Hospital-Group Contracting Issue?
New Years Un-Resolutions
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.


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.