Manage Your Practice

Why a 59 Year Old Deli Is a Case Study for Your Medical Practice

August 21, 2014

Where’s your next meal coming from?

Medical practices, from those of solo physicians to large groups, can’t take that question for granted.

Junior’s Deli, an institution on Los Angeles’ Westside from 1959 through the end of 2013 was by no means your average deli; rather, it was a breakfast, lunch, dinner and late-night eating spot. It was packed with people doing business deals at breakfast and at lunch, with families at dinner, and with writers and entertainment industry folks late at night. At one point, it served more meals per year than any other restaurant in Los Angeles.

And then, poof, the landlord demanded much higher rent, more than the owner said he could afford, and Junior’s was no more. It went from fully packed to all packed up.

Although writing this is making me hungry, this is a post concerning medical groups, not turkey on rye.

Are you in a “Junior’s situation?”

That’s the risk of an office based practice dependent upon a hospital relationship or single large referral source, or of a hospital-based group dependent upon a single hospital relationship. They’ve allowed themselves to put their future in the hands of someone or something that can simply terminate that future at will.

The employed physician is laid off by the hospital. The radiology group has its exclusive contract terminated. The large primary care practice hires its own orthopedist and turns off its referrals to you.

As they say in financial services ads, past performance is not a guarantee of future results.

How dependent are you on a single referral source, a single exclusive contact, or, some other disproportionately important third party?

Some medical groups are far better at setting a strategy to protect their future, setting a course to wean themselves of over dependence upon the whims of third parties.

Others – probably most – just keep smiling as they push the keys on the (metaphorical) cash register, just as they did on the actual cash register at Junior’s. That is, until the place closed.

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