Mergers & Acquisitions

The Odds of Medical Group Survival

December 31, 2013

My dog stood body frozen stiff yet ready to lunge. His eyes fixed on the only object in his world, the squirrel eating seeds off the ground 14 feet away.

The squirrel matched the stare, glanced at the tree about four feet distant and then, continuing to eat the entire time, just turned his back as if he were the only one who would be doing any eating that day.

Businesses, including medical groups, do the equivalent. In a complex system there are who-knows-how-many unseen risks. But there are many significant, obvious risks as well, risks that may be acknowledged intellectually but ignored as unimportant either because the observer is lying to himself or is unprepared to deal with them.

The squirrel’s bet was a good one. My dog’s never caught one. But maybe one day he will. For the squirrel it will be low odds times high potential damage (death) equals high risk, ignored.

But it’s not that the risk wasn’t there every time. It was; it’s just that the odds came out in the squirrel’s favor that day. For the squirrel in the yard, the odds of being eaten had come out in his favor his entire life.

Medical groups that have had successful 20 year or 30 year or even longer runs have benefited from a similar run of the dice.

Several years ago, I had another dog, Showlow. I had the task of removing squirrel parts from the back yard on a regular basis, even once having to tell her to drop the head as if we were playing the Addams Family version of fetch.

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

Mark F. Weiss

www.weisspc.com

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