The Business of Healthcare

Driverless Cars Might Not Crash but They Will Impact the Business of Healthcare

I’m writing this on a Saturday, a couple of days before publication. I’m about to head off to meet with a futurist to brainstorm some ideas.

Speaking of the future, lots of people are talking about driverless cars.

Suppose those people who want to sell us driverless cars, or to force us into driverless cars, are right and that we’ll all be driving in them. What’s the impact on healthcare? What’s the impact on your practice?

Assuming, and yes, it is a very big assumption, that driverless (that is, people programmed) cars might actually be safer than people driven cars, will there be fewer accidents? According to Centers for Disease Control data, in 2006, 3.2 million people received non-fatal injuries from auto accidents. And, according to a 2013 report from the Agency for Healthcare Research and Quality, auto accidents resulted in approximately 2.8 million emergency department visits in 2010, which was around 15% of total emergency department visits for injury that year.

What happens if that business (no, I’m not coldhearted, but I’m writing this for healthcare providers) goes away? What’s the impact on the number of emergency department physicians needed? What’s the impact on the amount of nurses needed? What’s the impact on the number of hospital beds needed? What’s the impact on the number of specialist consults and surgeries and physical therapy and on and on? What’s the loss to the bottom line?

Yes, I’m warming up for the discussion with the futurist. This part of the warm up fits well with my own “futuristic” work, my book, The Impending Death of Hospitals.

But this self-driving car trend and many others and the way they intersect help lubricate the mind and lubricate the discussions among medical group and other healthcare leaders in exploring alternative futures, futures into which you must project your practice or business. That is, unless you want a driverless car to drive you to the poorhouse.

What are you doing to envision your future?

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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Hospital-Physician Owned ASC Sues Freedom Loving Physician Entrepreneurs for Competing

The Sioux City Journal reported last week (on 12/29/17) that a hospital-physician joint venture ASC, Pierce Street Same Day Surgery, filed suit to enforce covenants not to compete against a number of current and former physician investors.

Pierce Street is also suing the medical group, Tri-State Specialists, owned by some of the individual physician defendants.

The flashpoint is the defendants’ development of a competing ASC, Riverview Surgical Center.

That’s the straightforward news. But, what’s really going on? And why should you, probably not a surgeon in Sioux City, care? Keep reading. It will become clear, really clear.

Pierce Street, a joint venture between physicians and UnityPoint Health – St. Luke’s hospital, is located in Sioux City, Iowa, a Certificate of Need (“CON”) state. Pierce Street alleges that the defendant doctors signed agreements that bar them from being involved in a competing ASC located within 30 miles of Pierce Street, both while they are owners and for a year after.

Tri-State Specialists and the defendant physicians are developing their competing facility in Nebraska, just across the Missouri River, the state boundary, from Sioux City. That site is 4 miles away from the Pierce Street ASC.

Here’s what’s interesting for any physician, for any ASC, and for any hospital administrator, whether you’re in Sioux City, Scranton, or San Francisco, or anyplace else.

1. I haven’t seen the underlying agreements and so I can’t tell you if I think the specific covenants not to compete are enforceable or not, but either way, physicians that sign them and facilities that demand them must understand their limitations and their obligations. They may be BS (I’ve worked with a number of physicians on their escape from unenforceable provisions). They may be enforceable, in which case the damages could be severe. But either way, those that demand them are often serious about attempting to enforce them . . . whether they are ultimately enforceable or not . . . and the transaction costs of that battle can be staggering.

2. Nebraska is a non-CON state. Facilities located in a CON state, like Iowa, may think that they’ve blocked competition, but if they’re located anywhere near a border with a free state, the protection is illusory.

3. More telling of the future, and while I can’t get into the heads of the competing physicians or of the Tri-State Specialists’ medical group CEO, but I’d guess that they realized that they didn’t need a hospital partner to run an ASC. Pierce Street alleges that it will lose 60% of its volume to Riverview, and that’s sure to put a pile of profit into the Riverview physician-owners’ pockets. As a regular reader of the blog, you know that that’s one of my main points: hospitals are dying and, so, too, are hospital-affiliated ASCs. Hospitals are becoming anchors around the feet of entrepreneurial physicians.

4. Riverdale is being built next to an existing Marriott hotel, with the intention that patients and their families can stay right next door. That’s a low-cost twist on my concept of the Massive Outpatient Clinic™ (watch the related Success in Motion video), in essence, a “non-hospital hospital” campus. Just as physicians no longer need a hospital to partner in an ASC, you no longer need a hospital to partner in what is nearly equivalent to a hospital.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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Customer Service

Why Not Wanting the Deal Is the Way to Get It (or, If Not, Who Cares!)

It’s about 1 pm on Sunday and I’m thinking of getting a cheeseburger for lunch. But if I don’t, it won’t make any difference to me.

Can you reach that same mental state in connection with the deals that your medical group does, or that you do for your solo practice?

It’s trouble if you can’t.

At the most intense end, you’ve allowed yourself to get into a situation in which someone else, your deal “partner,” holds the key to your continued business existence. Think of a hospital-based group that is dependent upon the continuation of their one major hospital exclusive contract. No more contract, no more group.

Even at the least intense end, you’re bound to signal your wanting. You’re so hot for the deal that’s it like going on a first date with “I love you” stamped on your forehead. Think trying to do a favorable spine center joint venture deal with a hospital when they can tell that you’ll do almost anything to get the deal done.

Sure, you do want certain deals, certain things, certain accomplishments for your business. You do need goals. But pursuing them from a position of detachment as to their outcome strengthens your ability to close on them on favorable terms. Favorable to you, that is. The alternative makes you fall prey to someone else or, even worse, to yourself.

Time for lunch.

Comment or contact me if you’d like to discuss this post.

Mark F. Weiss

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