I have a friend, a physician, Tom, who’s always wanted to become a carpenter. Not the frame a house type carpenter, but one who builds beautiful cabinets and fine furniture. I’ve seen his work, and I can attest that he would have been the Leonardo Da Vinci of woodworkers.
If you wouldn’t have gone into medicine, what would you have done? Let’s pretend that, whatever it was, it was run out of a storefront located in a high-end mall. Maybe your store would sell only those Buscemi brand sneakers I wrote about, you know, the ones that sell for $800 a pair.
So you’ve got maybe $250,000 in inventory. Perhaps another $300,000 in computers and displays and other property. And, because you need to provide very high-end service to folks buying $800 sneakers, you searched high and low and hired the best staff you could find; you trained them well.
But then your lease is terminated. Let’s say it’s because the mall manager doesn’t like you. In fact, the mall manager has leased your store to one of your competitors, Soulless Soles. Can the mall manager simply lock you out, hand Soulless the keys and tell them they’re free to keep the entire contents of your store, and your staff?
You’d be on the phone to me in five minutes: “Let’s sue!”
But this is exactly what happens to medical groups when they don’t protect their practices, including their staff, from being handed over by a hospital to a competitor as a result of an RFP process or simply as a result of a de facto lock-out.
For example, consider the fictitiously named Jones Group, cardiothoracic surgeons who’ve developed a strong multi-physician practice based out of the fictitiously named St. Mark’s Community Memorial Hospital. Under pressure from one of the members of the group who seeks more power, the hospital announces that that surgeon, together with some surgeons from across town, will become the new hospital-sponsored group working from the hospital-run cardiothoracic clinic. That new clinic will be located in the office space currently (well, for the next 90 days, the without cause termination period) leased by the Jones Group. The rest of the Jones Group docs are sent scurrying for new office space and new referral sources, or for new jobs across the country. The goodwill of the Jones group has essentially been pulled right out from under them.
Or, for example, consider hospital-based Smith Group that provided services at St. Mark’s for 15 years. The hospital wants to consolidate Smith’s services with that of another hospital-based department and awards the combined contract to another group. The new group offers to hire all of Smith Group’s docs, except for its shareholders who are sent packing.
There are many tools available to protect your “store” from being turned over to the new tenants. Don’t just wait for it to happen and then decide to do something about it. The damage will already be done. You’ll have made it easier for your relationship to be terminated, easier for your business to be destroyed.
Comment or contact me if you’d like to discuss this post.
Mark F. Weiss