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Summer 2009


How Anesthesia Groups Thrive, Not Simply Survive

Mark F. Weiss, J.D.
Advisory Law Group, Los Angeles, CA

You’re building a house . . . well, your contractor is. He tells you that he’ll start by pouring the concrete foundation and then put on the roof, after which he’ll put up the exterior walls, followed by the chimney.

It’s easy to see the folly in building a home in that manner. But when an anesthesia group builds its practice in a similar manner, it usually goes without comment, even without notice.

“We need to address the issue of renewing our exclusive contract. It expires in July,” a partner says in May.

“We’re not able to retain our subcontractors. They’re leaving for better pay,” says another partner in August, after the exclusive contract has renewed.

“The surgeons are complaining about turnover time,” states a partner in September.

“We really need financial support from the hospital,” says a partner in October.

Just as in our analogy to home building gone awry, anesthesia groups often consider the instances of practice building, such as exclusive contracts, subcontracts and employment agreements, billing and collection activities, data management, and stipends, as separate projects, to be addressed on a piecemeal basis.

The secret to anesthesia group success, in any economy, starts with the realization that these are not separate instances at all. In order for your group to thrive, they must be linked together with strategy.

The Strategic Group

In order to succeed at the highest plane, your group must become strategic on multiple levels. It must develop an overall business strategy. It must then develop substrategies for each particular instance previously thought to be independent, e.g., an exclusive contracting strategy and a data management strategy, that are consistent with the group’s overall business strategy and which take into account the interrelationship among the various substrategies. Finally, just as the strategies are aligned, the tactics employed in furtherance of each of the particular substrategies must also be coordinated.

Leadership

Beyond the smallest of groups, two or three physicians, leadership cannot be by consensus or paralysis will set in. Successful groups must have leaders and leaders must be allowed the time required to lead and the ability to fail without fear of retribution.

Just as leaders need this freedom, group members are owed faithful performance: If your homebuilding contactor told you that he was too busy to pay attention to the organization of the job because he was spending all day hammering nails, you’d think about getting a new contractor. But most groups aren’t fazed when their “leader” essentially uses the same excuse, or when they guarantee the same result by tying his hands to a full share of patient care responsibility.

Give Me a Lever Long Enough . . .

Successful groups understand that they must create leverage. By having options to the deal, in respect of facility contracts, in respect of contracts with employed or subcontracted physicians, and in respect with their relationships with other third parties, they create tremendous negotiating leverage.

In particular, in connection with their exclusive contracting relationships, they avoid the most significant mistake a group can make: permitting the hospital to believe that the group’s mere existence turns on the hospital’s decision to grant or renew the exclusive contract.

Framing the Issues

Despite compliance issues, facts and budgets, emotion plays a leading role in decision making. Not only is telling the better story essential, choosing the theme of the story is required.

Relationships and negotiations, just like conversations, do not take place in a vacuum; they take place in a context or “frame.” Understand that there’s a battle on the meta level to frame the issues and that winning it can determine the outcome of the more observable conflict.

Touch Points

Successful groups understand that negotiation is not something that happens only in a boardroom. Each touch point with hospital administration, with other members of the medical staff, and with patients and their families is actually an element of the process of building support for your group’s positions. Everyday interactions impact upon the group’s image. In order to advance the group’s interests, you must control or influence as many of those touch points as possible.

It’s About Time

Although quick results in respect of certain elements of a group’s strategy are obtainable, achieving a transformational result for an existing group requires a long term view, optimally several years. After all, the goals are long term: group and member physician success. An understanding, in fact, an expectation that it will take time and effort to achieve those results is necessary and required.

But It’s Not About a Timeline

Progress in positioning your group to achieve maximum power in its relationships, and, therefore, in its negotiating posture, is not a linear process. As discussed above, the process involves an ongoing series of interrelated strategies and tactics. Each of these elements, once started, continue. In duality, each is both independent and dependent: Independent in that each element is focused on a particular goal; dependent in that each strategy and tactic supports the others in achieving the group’s overall business goal. Instead of the image of a timeline, picture instead an atom: Each of the electrons revolves independently, but they all revolve around the nucleus.

Beingness vs. “Gettingsomewhereness”

The problem most often preventing anesthesia groups from thriving is “beingness.” (No, this is not a metaphysical discussion.) They simply “are.” They exist to exist – to “serve” the hospital.

I suggest that the better route is for your anesthesia groups to exist to serve itself, to move from beingness to “gettingsomewhereness,” with that somewhere being of your own design.

Yes, plans go awry and no one can guarantee that there won’t be challenges to the strategy along the way. In fact, there will be countless small and major challenges thrust at you in countless ways. But the beauty of a strategic outlook consisting of interlocking processes is its flexibility while still guiding you to your envisioned future. The foundation may have to be shored up, the walls may have to be reinforced or allowed to sway to compensate for earthquakes, but you’ll end up with a house, not simply with a roof sitting on a slab of cement.


Mark F. Weiss is an attorney who specializes in the business and legal issues affecting anesthesia and other physician groups. He holds an appointment as clinical assistant professor of anesthesiology at University of Southern California’s Keck School of Medicine and practices nationally with the Advisory Law Group, a firm with offices in Los Angeles and Santa Barbara, CA. Mr. Weiss provides complimentary educational materials to our readers. Visit www.advisorylawgroup.com for his free newsletter. He can be reached by e-mail at markweiss@advisorylawgroup.com.