Impending Death of Hospitals

The Fast and the Dead

March 6, 2014

Let’s listen in to a series of calls from a potential deal partner to the office of the Smith and Jones Medical Group:

Receptionist: Good morning, Smith and Jones Medical Group.

Potential Deal Partner:  Good morning. May I please speak with Dr. Smith.

Receptionist:  I’m sorry, Dr. Smith is out.

Potential Deal Partner: Well then, may I please speak with Dr. Jones.

Receptionist:  I’m sorry, Dr. Jones is tied up.

Potential Deal Partner: OK. I’ll call back next week.

ONE WEEK PASSES

Receptionist: Good morning, Smith and Jones Medical Group.

Potential Deal Partner: Good morning.  May I please speak with Dr. Smith.

Receptionist:  I’m sorry, Dr. Smith is out.

Potential Deal Partner: Well then, may I please speak with Dr. Jones.

Receptionist:  I’m sorry, Dr. Jones is tied up.

Potential Deal Partner: OK. I’ll call back next week.

ANOTHER WEEK PASSES

Receptionist: Good morning, Smith and Jones Medical Group.

Potential Deal Partner: Good morning. May I please speak with Dr. Smith.

Receptionist:  I’m sorry, Dr. Smith is out.

Potential Deal Partner: Well then, may I please speak with Dr. Jones.

Receptionist:  I’m sorry, Dr. Jones is tied up.

Potential Deal Partner: Look, every time I call I ask for Dr. Smith and she’s out. Then I ask for Dr. Jones and he’s tied up. What is going on over there?

Receptionist:  Well, it’s actually very simple. Dr. Jones is extremely busy overseeing our staff working at four hospitals and every time she’s out, she ties up Dr. Jones. She can’t have him making decisions in her absence.

****

A silly little joke can illustrate a large problem.

If a medical group cannot govern itself, if it is structured like a true democracy, one owner, one vote on everything, or if it has a bloated board, it will never be able to make decisions with the speed required for its continued success.

The market is changing rapidly. One of the tremendous advantages that an independent medical group has, unless it ties itself up, is the ability to make decisions quickly, to increase the pace of, in the words of the late strategist John Boyd, its loop of observation, orientation, decision and action. But many groups throw away that advantage out of the mistaken belief that their business is a club.

They become too slow, too confused and without business focus.

Proper governance is not just a goal, it’s a precondition to success, even to, in this market, continued business existence.

Oh, you might be thinking that you got to where you are now with a 26 member board.

But that’s like being a real estate agent in a booming market — you think you’re a genius salesperson when you’re simply riding a market wave.

Yet now you’re on the edge of a precipice and it’s taking your group months to decide what color your new logo should be.

In today’s market, there’s the fast. And then there’s the dead.

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

Mark F. Weiss

www.weisspc.com

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