Looking over a physician’s contract I was reviewing the other day I came upon a single sentence set into the “benefits” section:
“After twenty four (24) months of continuous employment employee will be eligible for consideration as a partner of group.”
I’ve seen this language in countless contracts. Many of my clients, especially those looking at an employment agreement for the first time, have found it extremely enticing, as it seems to hold out a carrot of great value, one to strive for.
My question is always: What does that sentence mean?
Medical partnerships, and the operational documents that govern them, are all over the map when it comes to meaning, purpose and design. I have worked with clients who belonged to larger groups that were extremely well designed, with the partners contributing a portion of their income to create an MSO or IPA type entity that created real value by providing services like billing, credentialing, payer negotiations, HR, and the myriad issues related to compliance. Other large groups have arrangements to share income from ancillary services. In these organizations partnership means something tangible, beyond the ability to cast a vote on group decisions. And the structures of governance and partner responsibilities are carefully defined.
But the smaller groups, which is where the contract in question came from, tend to be much less defined when it comes to meaning (some have no idea of what partnership can look like or even how it could be organized). That was certainly the case in this matter.
My client, who had become an employee prior to our meeting, had found that there was truly little or no financial benefit in partnership. Since all of the partners followed the dictum “eat what you kill”, the partnership had no cash, and it’s only assets were the furniture and fixtures found at their two offices. The partners had abdicated all HR decisions to the office manager; she was also in charge of reporting and oversaw billing and collections. However, other than the individual income reports generated for the docs, there was no financial reporting on the partnership. And no partner was assigned to oversee any specific operation within the practice’s structure.
The practice was successful for its doctors, but the partners were timid about making tough decisions, and partnership “meetings” were more about getting it over with than really exploring current and future operations. There were too many employees and none of the partners was interested in tight financial management. There was no budgeting for the costs of practice improvements.
In short, this partnership was nothing more than mechanism to require a response to cash calls for unanticipated expenses.
My client was staging his departure as a result—our analysis was that this partnership would be fraught with problems unless major changes could be made (and the existing partners had demonstrated no interest in doing so).
Partnership was an illusion. Make sure to ask lots of questions if you see this clause in a contract, just to see if it really has any weight. Tom Ellis III
I’m not a big fan of buzz words, but when I ran across this one--intrapreneur—I was intrigued. As organizations have grown larger, intrapreneurs—persons within a company who promote innovation within the organization—have become the new movers and shakers, and company executives are on the hunt for this new type of employee, for people who can lead on important internal issues and, where possible, effect internal change that’s positive and, in many cases, ground-breaking.
In my work with new docs, especially those coming right out of residency or fellowship, I tend to see three distinct types. There’s the new physician that just wants to practice medicine, and not be bothered by operational issues. There’s the new doc that is only interested in those operational matters that have a direct impact on his or her bottom line. Finally, and more rarely, there’s the intrapreueur, the one that looks at a bigger picture of healthcare and is looking analytically at their practice, the group’s practice, and the immediate healthcare environment, finding ways to make very productive changes that benefit their practice, group, patients, and hospital.
As the business of medicine grows more complex, and undergoes rapid change, it’s almost impossible for one physician to cover all the bases. I have always suggested to my clients that they look at their practices as multi-faceted entities, and that they break down the most important pieces—contracting, HR, patient satisfaction, hospital integration, etc.—into silos, assigning responsibility for each. Spread the responsibilities, hopefully matching each silo to the interests of the physician. This helps create strong group leaders. Even the smallest groups should bifurcate responsibilities and set a schedule for reporting meetings as well as a mechanism to deal with urgent matters.
Of course, having a good administrator to help coordinate all of this can be crucial (and should be part of any job description for this position).
What typically happens is the intrapreneurs rise to the occasion. They search for a better way to do things, and do not look at this responsibility as just non-reimbursable burden. These are the folks that will be leaders in your group practice in the years ahead. They are the guys that read the literature, keep up with what’s going on in medicine, and understand the concepts of “Best Practice” as they apply to medical practices. Typically, they often become leaders within their hospitals or surgery centers as well.
I also suggest to my clients that they amend the interview process when hiring new docs. They need to ask questions designed to help identify the intrapreneurs, as well as those new hires who just want to come to work. For those who want to get involved, groups need to find a way to reward them for their extra effort.
Consideration might be made to add a certain level of operational responsibility into the wording of employment agreements—maybe even for all new hires. Group culture should be amended to require all new hires to understand that they are expected to be integrated both clinically and operationally, with tasks in the latter category designed to get them involved in the operations and business. Start small, expand as the talents and interests of the new hire begins to surface. You may have more intrapreneurs in your practice than you know. –Tom Ellis
A few months back I promised to discuss this topic a bit more, discussing the ways affiliations can be built, maintained and expanded in functional medicine practices. Let’s start with a few of the basics.
The primary combination of a good nutritionist and an FM doc is an absolutely “must have” for any functional medicine practice. Nutritionists don’t have to have an FM certification but need to be working in that direction; same with a doc if they don’t have an FM certification.
These two must get comfortable with each other to form an affiliation: More than just sharing referrals, the combination must be part of a clinical practice that is dedicated to expanding the patient experience and overall patient wellness. In my opinion, this is one of the most critical question to ask, and the answer has to be YES.
With this accomplished, the affiliates (I don’t want to use the word “partner” because it has an array of legal meaning) need to talk about their vision for creating this relationship, and discuss in detail their vision for the practice and its patients. Look down the road--Where would you like to be in 12 months? 18? 24??
What’s most important is that you have a frank, open conversation about these topics. Don’t think it will happen in one meeting. Outline everything you can think of that would involve your new “affiliate” And don’t leave any questions unanswered. Write it all down. Diagram it out. Detail it in great depth.
Remember, on top of all of this is that commitment to improving the patient experience. This is always true of any affiliation you build—the patient experience has to be foremost in your mind, with patient satisfaction and wellness a number one priority. FM patients want a holistic, overall assessment of their problems, and the experience they are looking for is very different from that of traditional medicine, which tends to deal only with one clinical problem at a time and can be much more fragmented. The larger, successful FM practices have the vision of a “one stop” shop in many ways, everything a patient can need combined, as much as possible, under one roof.
This planning process is extremely important, because it sets the parameters for budgeting and integration. There are a number of different financial and operational models, but all are based in large part on who contributes what—EHR platform, phone system, clerical staff, billing system, marketing costs, leased space, etc.—and then what needs to be purchased. For example, you should have one EHR system to create complete patient record, and one billing system that can add information to the latter. And you have to look at pricing, taking insurance vs. cash only, etc. This is a more complex problem that I’ll expand upon in a future blog entry. This is where a consultant can be of great value in helping you align the financial and operational aspects of the now, and then further down the road as you reach to complete your vision.
The best FM practices plan for growth, and work to expand the patient experience, in a logical and sustainable way. They are always looking beyond the now, planning for growth, including the costs of growth. They are continuously asking questions about how to help the practice grow and be more comprehensive for the patients.
But as you start this process of affiliating, remember, it’s a medical practice. It’s also a business. Synching these two elements up is critical, with both having equal importance. More on that down the line when I’ll look at one or two specific areas of planning for growth. ---Tom Ellis III
When most people talk about “social purpose strategy” they usually mention some of the companies that have been most successful to making it part of their branding and marketing. Patagonia is one of the first to come to mind—their constant commitment to environmental matters and to a manufacturing process that pays fair wages to workers shows concern for working environments and addresses sustainability and global concerns.
Their angle is to emphasize the social benefits their mission (i.e. social purpose strategy) brings to consumers and the world at large. Patagonia has built this message into every aspect of their product line and image. It’s a key element of developing a strong customer relationship, to develop and maintain a strong brand loyalty.
Recently I was speaking with a physician friend who regaled me with a wonderful story about volunteer work he did annualy deep in the Central American jungle. These trips were part of the only annual visit to this remote region made by doctors in his specialty, and there would be long lines awaiting the opening of their mobile clinic every morning they were there. Treating dozens of patients every day, of all ages, was clearly one of the things he looked forward to every single year.
Doctors of all stripes that I’ve met or worked with over the years have had similar stories. Doctors are giving people. They are also reticent to talk about the wonderful work most of them do, pro-bono, in their local communities and around the globe on mission trips.
So why don’t doctor’s expose these activities to their patients? In the twenty plus years I’ve been working with them there’s only one (!) physician I can think of who even had pictures in his office that revealed how he donated his time and efforts to provide care to those without it. (This excludes ortho-pods, who are quick to paper their offices with pictures from athletes and athletic organizations they work with and keep healthy.)
I would suggest that docs add social purpose strategy to their efforts to brand. If you support a group like Doctors Without Borders, put up some pics of trips made on their behalf, or even information about the group in your waiting room. If you work a mobile healthcare unit in Central America or Africa, why not display some pictures from these trips along the office walls? If you’re involved in a local free clinic, how about literature that explains what/who the clinic treats, along with donation contact information?
Patients today are told they are “consumers” of healthcare. The fact that you’re a great doctor is always, first and foremost is your best calling card. But to further your reputation (i.e. brand), there’s nothing wrong with letting your patients, and the community, know about the things you do, on your own time, and often at your own expense, to make the world a better place. Consumers like to do business with those that give back, and doctors give a lot. Integrate social purpose strategy into the way you look at your overall marketing and the image you project. Your patients will appreciate you even more.---TOM ELLIS III
For Med School Graduates the Entrance Strategy More Important Than the Exit Strategy.
This article will appear in Dallas Medical Society monthly newsletter in early 2018.
Two years ago I fielded a call from a surgeon I knew of but had not met. Raised locally, she had left the state for undergraduate school, returning to Texas for med school and North Texas for her fellowship. Heavily recruited, she wanted to stay close to home and her family, and accepted a position with a group of surgeons practicing at one of the area’s stellar hospitals.
But she wasn’t happy, two years into a three year employment agreement. In fact, she was angry, frustrated, worried, and greatly concerned about her future.
What had started out as a warm and fuzzy relationship with her group had gone decidedly in the wrong direction.
The genesis of her story is almost a cliché in the physician recruitment environment. In the last year of her fellowship, she suddenly started receiving inquiries from established practices or hospital employed groups, pitching a great future, good salary, moving expenses, and even a signing bonus. Two visits to her soon-to-be employer focused on where to live, meetings with all of the group members, a hospital administrator or two (representing her surgical sites), and a real estate agent to look at homes. Everybody seemed nice and she liked what she was shown. Money was discussed, and a contract arrived shortly after the second visit. She asked for a recommendation on a lawyer to handle the latter.
The lawyer was hired, and she consulted the internet about medical employment contracts, only to find the “eight things a medical employment contract must have” which she focused on exclusively during the negotiations. Her lawyer followed her lead. Within weeks the contract was signed, and she returned her focus to her final year, relieved of the pressures of finding a job.
It was a story that’s been replicated thousands of times. Now, barely two years later, she was miserable. What could have happened?
She never scratched the surface. Or asked enough questions.
Most of her complaints were around issues which should have been discussed and/or documented before any contracts were mailed, much less negotiated. For example, she never saw examples of the reports provided to each physician, that outlined patient counts, charges and revenue; they turned out to be woefully inadequate, and belied some serious issues with the group’s billing practices. The practice had policies and procedures, but they only applied to the staff—there were no rules for the doctors. Governance was not in place. She was assured overflow, but as soon as she everyone got very protective of their patient base, and the overflow was far less that what had been promised. Mentoring her in certain procedures was quickly abandoned, and she was left alone to do surgeries where she needed guidance (her surgical times on these cases were excessive as a result, which made the hospital unhappy). When the group decided to start taking call at another facility she was not consulted, creating issues with her family. When the practice’s payer mix changed she was given no notice about the financial impact this would have on her collections. And why was it that the patients with badly reimbursing insurance always seemed to appear on her schedule?
This list wasn’t even half of the problems she recited. All of them could have been addressed, and many included as terms of her contract.
In short: She had no “entrance strategy.” And now conditions had become toxic, beyond repair.
The first step a graduate takes post-graduation may be the most important they take outside of their academic career. In this ever-changing health care environment, graduates, most highly sought after, need to take the time to look at both the clinical and business environment they are entering. If necessary, they need to seek guidance to help them navigate these issues (which are woefully under-addressed in medical schools), to make sure they ask the right questions.
As they say, divorce is painful. But in this instance there was a happy ending. We were able to extricate her from her contract, and although she had to relocate her practice 20 miles she’s happily employed now with a group that is attentive to the problems she encountered. On her second go round, she had a great “entrance strategy” and things we much different.
Tom Ellis III has been a healthcare consultant for over 20 years in the North Texas area.
Synergy is one of the most overworked and overused words in the language. Webster’s primary definition—“The interaction of two or more agents so that their combined effect is great than the sum of their individual effects”—is what most people know. But it’s the second definition that serves as the guide post for functional medicine practitioners: “Cooperative interaction among groups…..that creates an enhanced effect.”
I’ve worked with physicians in the world of traditional medicine for a long time and have seen the impact of synergy when two or more gang together, but generally the results of this are related to cost savings and other HR related items.
Functional medicine is different. Although there are cost savings to be enjoyed when practitioners merge, the real potential is in integrative, comprehensive program that can truly provide patients with the varieties of care FM practitioners want to be able to offer to their patients.
This isn’t meant to denigrate the solo practice. There are hundreds of great solo practices out there, all providing fabulous care. Last Fall I sat in on a presentation by a group of FM leaders, all of whom operate individually, and whose model for patient care has been successful for years. Bravo!
Let’s look at what a general grouping of what most FM docs would like to be able to provide their patients:
That’s a big list. So how do you get there? Affiliations.
It’s the old “stronger in numbers” approach. A solo practice can’t generate enough patients or revenue to approach most of what’s listed above. But building a strong alliance of like-minded providers/practitioners, especially under one roof or at one location, is the only way to create a patient base large enough to support expansion, especially of services like infusion therapy, bariatrics and nutritional counseling.
My experience in FM started with one client, an MD who had a nutritionist/office manager. She merged with another FM doc. Another MD. Then nurses and NPs. It took 3 years to get to the point the practice now has all of the above. All built through affiliations.
More on how create affiliations next time. TE