Open Thread

Check out Stiglich's site HERE.

Friday Open Thread

Black Friday?

The War
- by Doc Holliday

I have consolidated several posts by Doc Holliday that discuss the state of his current workplaces. They outline the age-old issues facing every large or aspiring business with regards to competing and controlling factions and the self-destructive nature these groups have on a business when focus is lost on the end product and instead is given way to power and control.

So thanks, Doc. While your nurses were eating fatty foods and making Tik-Tok-Twerking Videos, you were doing something productive!

Note: This is not the Daily Open Thread. *************************************************************************************************************************
Remember I told you I would write a bit about the ongoing battle between my group and the hospital? Well, here we go.

The War - Part 1

An introduction...

To understand this you must understand that a Hospital is a separate business from the various doctors that work in the hospital. Doctors may work for the hospital as employees, or they may be work in the hospital as private doctors if they have "privileges"--which means they have the permission of the medical staff and the hospital to work there. Doctors work together as "the medical Staff" to pass by laws, which regulate how the medical staff operates and how the hospital interacts with them. The second thing to understand is that the Administration of a hospital is interested in the perpetuation, expansion, and maintenance of one thing, and one thing only--their power and it's associated monetary rewards. They will always start every policy with some phrase to the effect of, "Let's all agree we're here to provide the best patient care possible...." This phrase is usually trotted out just before they do something that screws both the patients and the staff, including doctors. Similarly, the administration is also interested in keeping the Board off their backs, which is easy to do with the appropriate massaging of numbers.

Knowing these two things, you can see a power conflict immediately--the Medical Staff has certain needs and goals revolving around patient care and what they do and how, and these often conflict with the goals of the suits in the Administration, who want control, prestige, power, and to keep the Board as comatose as possible. This problem is magnified in our town, where there is only one hospital. Competition blunts it in a town like Birmingham, where there are a multitude of hospitals. My group started off as a hospital employed group, then we got tired of the hospital's crap, and left and became a private group, but still worked in the hospital. That progression of annoyance with the hospital's endlessly critical, ignorant, and controlling behavior marks the beginning of The War.

The War - part 2

Rumblings of war

I said the decision to leave and become a private group was the beginning of the War. That was certainly true for us, but the first battle of the War actually involved, not us, but the nursing staff. Here we have to go back and understand the Administration's desire to have absolute, unquestioned control over every entity in the hospital. So they first attacked the nursing staff.

The nursing staff at our hospital at the time was fully staffed with excellent nurses. There are 3 nursing schools in this small city, so we were well supplied with new blood, and the loyalty of the older nurses was rewarded with a special payment system that allowed flexibility in scheduling for less desirable shifts. The nurses were very happy with this system.

Enter a new nurse manager named Elaine. (Not her real name, but close enough) Nurse managers are hired by Administration, and are generally in house talent--someone who has been there for years. Elaine was an outsider, and got the job over a highly respected nurse who had been there 30 years. As you might expect, disaster ensued. Elaine, with the full blessing of Administration, ended the differential pay which had rewarded the loyalty of the long term nurses. Not only did she end that, but the new pay scale made it more profitable to drive 40 minutes down the road to work at one of the UAB Hospitals--and they did. To this day, we are more than 60 nurses short, and cannot hire enough, even with 3 nursing schools in town. Elaine left, but the damage she left behind remains. We are now understaffed dramatically, and many nurses are now travelers, who have no particular loyalty and are of lower quality in general.

The Administration did not care--they had won the first round. The nursing staff's cohesion was broken, and the Administration had thereby removed one power competitor from the field.

The War - Part 3

The Battles between my group and the hospital

So having wrecked the nursing staff, the Administration needed a new target. That would be us, the hospitalist in our private group. To understand why, an explanation is in order. We are one of two hospitalist groups at my hospital--the difference being that we are totally private and do not receive ANY money from the hospital. On the other hand the other group is sponsored by the hospital, and receives a stipend of $3 million per year. This subsidized group has NEVER been able to recruit a sufficient number of doctors to cover the hospital, so the Administration asked us to begin to work at the larger of our two hospitals, which we previously had not worked in. We agreed. We rapidly expanded from 2 docs to 8, and we now see 1 in every 3 patients in the hospital. We also quickly eclipsed their group's size and productivity. And as we did so, their hostility to us increased. They did not like our system for seeing patients and they attacked that system, they attacked some of us individually, and they constantly were trying to exaggerate small issues to imply we weren't doing our jobs properly.

You might be curious as to why they would attack a successful group. In so doing you have answered the question--we were making their group look bad, and they were concerned that the Board would awaken from their coma, and ask "Why are we giving this other group $3 million, when they can't keep up with the private group?" So they spent enormous effort trying to develop criticisms they could relay to the board and use as a cudgel to threaten us with.

Then they proposed we merge with their group. Having left their clutches just a few years before, we politely declined. That conversation was what enlightened me to their true purpose--they were trying, once again, to get control of us, as we are opinionated and often disagree with their plans, particularly my partner who is the head of the group, and who is both a doctor and a lawyer. In essence, they were trying to shut us up.

The War - Part 4

The Administration Wrecks another Service...

So as I noted before, the War isn't just about my group versus the hospital. Let me see if I can state, as plainly as possible, the Adminstration's goal: The Goal is to consolidate control and power by reducing the medical staff to employees of 3rd party entities. The medical staff is the biggest thorn in the side of Administration. The bylaws allow the docs to block many of the more egregiously stupid or destructive ideas of the Administration. Like any group of Totalitarians, the Administration hates this restriction on their authority. So they seek to make everyone an employee of a staffing company, so they can then go to that company and demand the company get rid of troublesome docs. Of course they would do so quietly, to hide their involvement and keep their hands clean. This is not speculation--they have done it to our pulmonary docs.

We have an excellent group of very well respected pulmonary critical care docs who have been there for years. The Administration, having hired yet another outsider, this time for COO, suddenly decided they wanted a new intensivist group and closed ICUs. Our own Pulmonary group was blindsided--but they put in a bid, asking for help with recruiting 2 new docs to provide all the coverage the hospital wanted. The Administration chose an outside group to provide the service, spending AT LEAST $8.4 million dollars a year for something the native group would have done for around $1 million. As you can imagine, this national group has a few good docs, and a lot of average or worse docs. NONE of them live here--the hospital has to fly them in and house them, and it takes 4 of them to cover 24/7. So that $8.4 million above is way short of the full cost. But again, they do not care. They have now reduced the power of one of the most respected groups in the hospital, and they count that as a win. And the Board? They are still sleeping.

The War - Part 5

The Biggest Battle So Far

So let's state it again: The Administration's goal is to consolidate control and power by reducing the medical staff to employees of 3rd party entities. Having wrecked the pulmonary service and introduced a lower quality 3rd party Intensivist group at ENORMOUS cost, the Administration with their new COO turned their attention back to us.

Our hospital has 2 facilities. At the smaller facility, my group had held the exclusive hospitalist contract. Administration quickly announced they would not be renewing our contract and they wanted bids for a new group at this smaller hospital. Their excuses were incredibly lame--the new COO blatantly lied to the Board about our performance, then lied to us about the reasons for the failure to renew, even claiming we were "Hard to get in touch with" despite the fact that there are full time nurses who answer our calls and the nursing staff overwhelming praises how easy it is to get us on the phone.

We did not take this lying down. We had heard rumors this was coming, and had been running billboards to develop name recognition, we started an internet campaign for supporters, and we basically forced the hospital to answer to the press about what they were doing. Needless to say, they didn't like that AT ALL. We even had one of our black doctors write an editorial about how administration didn't reflect the racial makeup of town. (Dirty leftist argument? Maybe so, but this is War). In the end, they rewarded the contract to a combination group made up of THEIR OWN HOSPITALIST GROUP plus a small recruiting company. In my opinion, this was their way of further covering for their own decision to fund the other group to the tune of $3 million a year.

So we lost out. But in so doing, they have made a terrible and expensive mistake, which we will explain in the next section.

The War - Part 6

The Administration Steps on a Landmine.

So with the change to the contract at the smaller of the hospital, it would seem the Administration has made an enormous mistake. Allow me explain. My group, over the course of the last few years has acquired the contracts for admitting virtually all the patients from all the private docs in town. Importantly, this means that we have ALL THE PATIENTS WITH INSURANCE. In addition, according to the By-laws, private groups have the right to choose who admits their patients--and that means us, for the vast majority of patients.

So what's the big deal? Well, our current status owning all the contracts means the new group will be left with unattached patients (people with no doctors) with no insurance. Good luck paying your docs, administration!

Not only that, but Administration's aggressive anti local doctor behavior has so rattled the docs in the other group that several of them are leaving--they are simply disgusted with the Administrations behavior. This is a HUGE PROBLEM for the Admnistration-remember, this is the group that has NEVER REACHED FULL CAPACITY which caused us to start working at the larger hospital. Now they need a total of 30 Docs--and they started with 17, and 5 have quit. So they need to recruit 18 doctors to little ol' Tuscaloosa, something they have never accomplished in more than 10 years. If they can't--and they can't--the hospital will have to hire traveling doctors. These are called Locum tenums, and they are ridiculous expensive.

So the hospitals belligerence has left them with a situation of losing docs, having to recruit, pay locums, AND THEIR PATIENTS HAVE NO INSURANCE. A total and utter disaster!--They have certainly earned it!

The War - Part 7

So the War continues after a brief hiatus at my hospital.

The hospital's new selected group has started seeing patients at our smaller campus. They are still having a difficult time recruiting--I know some of the people an hour away in Birmingham who they have been trying to recruit, and they report the offers are being laughed at. But never fear! The morons who run our hospital will persist in their foolishness.

Why? Well, let's remember this has to do with CONTROL and MONEY and NOT patient care. And as I mentioned in the last section, they are being eaten alive already by money issues. The big new conflict now is they are actively stealing patient from us, by forcing the consults to go to their group, even though the consult specifies us. This is in direct violation of the Bylaws which the hospital is supposed to run on, and so you know what has happened--we are suing them. We had an initial hearing and the court did not provide injunctive relief (we thought that would be the case) and so now there will be a trial. I'm not sure when just yet, but it's coming and we hope for a major beat down for the hospital and for the court to order them to resume following the bylaws. But this is a small town, the Hospital is a Big Player, and the Good Ol' Boy network is in effect, so we may be out of luck from a judicial standpoint.

Nevertheless, we have received some unexpected good news--one of the Cardiologist, who is not a big fan of ours (and the feeling is mutual), has some insight due to his committee assignments and states the current Administration of the hospital is quickly getting into hot water because they are posting big losses, which seems to be the only thing that gets our comatose Board's attention. He said he does not expect to see the current Administration last 2 more years and sometime soon, "...they will be swept away." How much have they lost? Apparently, they posted, or are about to post, a $25 MIILLION dollar loss. Ouch. I learned of this from another doc who is from the Pakistan/India area, who said with a laugh, "So you just sit tight and be like the Taliban, and these people will leave." I laughed and said, "Where do I get my black Turban?" This doc is very in the know about all the goings on, so if he believes this, I'm pretty sure it's accurate. We shall see.

Meanwhile our outpatient clinic is steadily becoming busier, and we are thinking about adding a franchise urgent care, all to make sure we have a base outside the control of the hospital.

The War - part 8

In which Doc's group engages in Flanking maneuvers...

So a lot is going on in the War. The hospital continues to steal our patients, our court case against them is still pending, but we have maintained a healthy inpatient number as we now have our own patients to admit and some of the private guys and specialists are helping us by having their patients demand to be admitted to us. Since several of our docs are now doing other things, the smaller numbers have not hurt us much financially.

That being said, those of us remaining are well aware the hospital is attempting to undermine us at every opportunity, so we have, as I have previously mentioned, started a new outpatient office. This is actually something I had promised myself I would never, ever do again, but circumstances demand it--and it's working! We are seeing patients 3 days a week, and all 3 of us are now seeing more than 20 people a day.

The BIG news is that one of our former partners and his physician wife have decided to quit their practice, and have asked us to take over their patients--this is an enormous deal--they have a total of 6000 patients, and while that sounds like a lot to non physicians, 3000 patient charts per physician is about normal--obviously not all of these people are still living, or still available. Combine it with our practice and we will instantly be at a profitable level of patients. This has several salutary effects--the office will begin to make enough money to pay us (the physicians) some amount, and the large number of patients will lead to more admissions from our clinic, which the hospital cannot touch (or they haven't tried, as of yet). These new admits will keep us at a nice level of people in the hospital, which is additional very low overhead income for us.

Of course, change is challenging. We will have to move to a new location--we have our eyes on two spots now, and will probably pull the trigger on one in the next 30 days. Some remodeling will be in order, so the actual move in time is up in the air. We are also discussing partnering with some of the local urgent cares to provide higher level lab services and further increase our patient base. We would really like to have an urgent care side and a longitudinal care side for the office. We shall see... In any case, developments thus far are very positive for the office, and interesting things are happening inside the hospital as well. Last update I mentioned that the current administration is getting in hot water with poor financial performance--and recently I got some confirmation of that, when it was announced that one member of the administration is retiring and will not be replaced "due to challenging financial times for the hospital." This is a very interesting, and for us positive revelation--the Doc who is leaving is our arch enemy in the hospital (and he is truly retiring--both from the administration and medical practice, and good riddance), and this is the first time we have heard Administration admit the money is tight. As I've mentioned before, rumors of an administrative shake out are getting louder, and couldn't happen to a more deserving bunch.

So we will continue our positioning to reduce dependency on the hospital, and watch that sucker burn while we point and laugh....

The War - Part 9

"The World is run by people who can do math"--a friend of mine.

We will take a detour in the story of the hospital versus my group for a minute to discuss how we as a group make business decisions regarding the what do. We will leave aside the intricacies of billing and focus on some simple averages which tell the tale. It will not surprise the astute readers here that it all boils down to this: The more people you see, the more money you make.

Let's start in the hospital. The average collection for a doctors visit in the hospital is $75.00. So, let's see what happens with that number over time.

If you have 25 patients a day in the hospital (the doctor slang is "in house" or "on service") year round the numbers look like this:

25 patients x $75/day x 365 days= $684,375 per year Now let's take away expenses of say, $250,000 for your nurse practitioner, fees, licenses, etc. That leaves $434,375 That would be divided amongst the 3 of us, for a total of $144,791 each for the year. Now watch what happens if your patient load expands by 10 patients to 35 patients a day 35 patients x $75/day x 365 days= $958,125 per year Minus those same $250000 in expenses Leaves you with $708,125 Divide that amongst the 3 of us and its $236,041 each. Not a bad raise! Now watch what happens if you have 50 patients in house 50 patients x $75 x 365 days = $1,368,750 Expenses are still $250000 Leaving you with $1,118,750 Divided amongst the 3 of us is $372,916!

Now you probably understand why we get very upset when the hospital steals even a few patients--it makes a HUGE difference in our income. The clinic works much the same way, just substitute a collection of about $100 instead of $75 in the calculations. But that's not the whole story in the clinic--because here, we can supervise nurse practitioners, and see many, many, many more patients. For example, one of the local urgent cares has NPs seeing patients. They see 100 patients a day, and we know for a fact their average collection is $108 per visit.

So let's do the math for this busy group: 100 patients/day x $108/patient x 365 days= $3,942,000 before expenses. And so remove the expenses, which are about 50%, leaves $1,971,000 to be divided That would be $657,000 each for the three of us! That's in addition to the hospital income. So the total potential (if you have 50 inpatients) for this combination is just over $1 million dollars a year! Now do I think we'll hit 100 patients a day in the office? Well, no, probably not anytime soon. Will we hit $108 dollars a visit? No probably not, this is an urgent care which can do many labs and X-rays, and we are a longitudinal office (that's why we're trying to partner with them). But we are aiming high because we want to not be dependent on the hospital. And if we're 50% off? Well $500,000 a year is way more than I make now, so that's still good!

Anyway the point is that under all the complexity, it still comes down to "How many patients do you see and what do you do for them?"--that determines how much you make.