Business question...full disclosure??

[Nathans_Dad]

I have a bit of a dilemma. As some of you know, I am a doctor here in the D/FW area. I run a small group of hospitalists (docs that only treat patients in the hospital). Our referral sources are the clinic docs in the community that no longer wish to come in and admit their patients to the hospital.

There are two hospitalist groups at the hospital I work at and which patients who to which group is governed by a list in the ER that has the name of the clinic doc and which group they have said they preferred to use for their patients. This list has been around for 4-5 years and prior to my arrival was just decided by "verbal agreement", i.e. one group would say "We talked to Dr. X and he wants to use us".

As time has gone by, the community docs have been pretty much staked out. Prior to my arrival, the leader of the competing group was pretty aggressive in his marketing and had about 70% of the referring docs on his side. I was brought in to lead my group and grow it.

So, we renamed the group, came up with marketing materials and the first thing I did was go out and meet with every one of our existing referring docs to make sure they were happy with our services and basically to meet and greet. That was about 15 months ago or so.

Oh, by the way in the interim the old leader of their group left the hospital. They are currently "led" (I use that term in quotes because the woman leading them really has no desire to be the leader nor the personality to be the leader, but it came to her by default because she had the most time in the group) by a woman of Pakistani origin. I say this not to be racist in any way, but to convey a sense of how she deals with situations. If any of you have dealt with middle eastern women before, you know that they tend to be very reserved and non-confrontational.

So, about 8 months ago we started a marketing campaign. This consisted of mailing out pamphlets about our group and setting up some meetings with docs that currently either didn't have a group they preferred or were admitting to our competitor. I e-mailed the leader of our competing group to inform her that we would be marketing. She e-mailed back and asked that I not talk to any of the docs who currently admit to her group. I replied that I would be talking to all the docs in the area, even those who currently admitted to her group.

So, I haven't been very aggressive, mainly for political reasons...it doesn't do me any good to rock the boat too much and piss off the other group. I have met with 4-5 docs so far and we sent out the pamphlets to all the docs about 6 months ago.

Ok, so here's the question (after all that background). In the last month, I have heard from 4 docs who want to switch their services over to us. Each one of them has written a letter on their letterhead (at our request) stating that they want to switch and they signed the letter.

Do you think that I should notify the other group either in person or via e-mail to inform them of the changes? Again, the changes are going to be reflected on the ER list which is posted for all to see in the ER. I don't think it is my job to keep an eye on their practice or to inform them of the status of their own referring docs.

Thoughts?

[stomachmonkey]

Originally Posted by Nathans_Dad

I don't think it is my job to keep an eye on their practice or to inform them of the status of their own referring docs.

Thoughts?

I think you are correct.

[Jim Richards]

me too.

[Rot 911]

Unless you Docs have some ethical rule that bars this kind of practice, I agree with the two opinions above.

[jyl]

Agree. Not your problem.

[Hugh R]

I'd only do it if it provides clarity and aides in the transition of the services, otherwise, no.

[nostatic]

only if you want to stick it to the (wo)man...

[Rick Lee]

Two kinds of problems in the world - theirs and yours. This sounds like one of theirs.

FWIW, I can't recall a customer ever informing me ahead of time that they were going with a competitor unless it was required by an RFP award, contract language or try to bait me into cutting our prices to keep them. They don't just do it out of politeness. And you wouldn't want to give your competitor a heads up or a chance to have them entice the customer to stick with them.

[legion]

Turn the tables.

What would you expect if the old leader of the competing group had lured away one of your doctors?

How does the "list" play into this?

[TSNAPCRACKLEPOP]

I do not think it is your problem, but will the dox all get their kickbacks? j/k!!!!

I would try to make some kind of notification, because sometimes a pt. ma think that doc A is just ignoring them when they present to the ER.(if they see their old doc)

Might save some problems in the future. Who knows, some of their docs may end up working for your group sooner than you think!

[Porsche_monkey]

By informing her aren't you just giving her an opportunity to call them and talk them out of switching?

[Moses]

I think you're approaching the problem from the wrong perspective.

It makes no sense at all to develop an adversarial relationship with your "competitor". In fact, they are not a barrier to success at all. The enemy is your hospital and the insurance companies. The fact that there are TWO groups of hospitalists is your greatest barrier to success. The concept of two competing groups of hospitalists is completely DAFT. You are directly serving the interests of the hospital and insurance companies at your own expense.

I've been in your situation and I was able to coalesce a disparate group of physicians who harbored no love for one another. We have signed a collective agreement with our hospital for coverage and we are doing quite well. A far cry from the old days when we were at each others throats.

Until you realize that the "other" group of doctors are colleagues and not competitors, you will continue to struggle and live at the mercy of the power brokers.

Feel free to PM me if you want to discuss specifics.

[Nathans_Dad]

Moses,

Agree with everything you said. I have approached both the hospital admin and the other group about merging. The hospital admin was lukewarm to the idea (of course, they like having two groups who are competing) and the other group was not interested in the idea at the time.

The other group is managed by a private company that has pretty significant non-compete clauses in their contracts and has a history of suing docs that try to leave them. Thus, it would be very tough for the other group to get out of their contracts and merge.

As far as whoever asked about turning the tables, I understand your point and I have thought about that alot. Honestly, I look at the list about twice a month anyway so if there were any changes to the list, I would know pretty quickly.

The reverse situation did occur right when I arrived, there was a doc who we thought was admitting to us who in fact had decided to change over to the other group. I looked into it and that is what prompted me to visit all the docs and determine their actual status. I learned my lesson then.

[Nathans_Dad]

Originally Posted by Porsche_monkey

By informing her aren't you just giving her an opportunity to call them and talk them out of switching?

In a word, yes. I don't think any of them would switch over because each of them has serious issues with the management company of the other group. Most have a history of either being sued by this management company or having to sue them for borderline unethical business practices.

[Moses]

In California, non-compete laws are virtually unenforceable. Check with a local attorney, I suspect it's the same in Texas.

I'm not saying you "should" merge, I'm saying you "must" merge. There's a foul wind blowing from Washington, DC and you are going to get hit. HARD. Once Medicare decides to slash and burn, your only protection will be leveraged support from your hospital and a position of power from which to negotiate with payers. Look no further than your hospitals anesthesia group for a working model.

[Nathans_Dad]

I am with you all the way here, Moses, but you have to understand the business climate here.

My group is managed by a 501a corporation which is under the local hospital system. Their group is managed by a private company who's #1 goal above all seems to be making money. Their management group's idea is to control all the patient flow in a given community and force all the other docs out of business. They are notorious here in Texas for this sort of thing.

First off, the other group has no reason to want to merge. They currently control about 60% of the business compared to our 40%. Granted, that is better than when I first came here, but they still have the majority of the business. They are on a per bill compensation method, they get a percentage of what they collect directly as salary. If they admit zero, they get paid zero. They are currently making more money than our group does, we are salaried with a production bonus on top of that if we meet certain goals. Our group is built for long term physician retention and satisfaction, theirs is the classic churn and burn for 2 years and then burn out your docs model.

There is no way our docs would join their group, both from a lifestyle and an ethical perspective, we just have too many issues with the way their physician management group does business. Their docs would have to accept lower salaries in exchange for better lifestyle and would have to deal with the legal ramifications of trying to leave their management group.

Non-competes are basically unenforceable here in Texas too, but this management group actually forces docs into court to have their non-competes voided and thus you incur $10-20k in lawyer fees to get out of your contract. Experiences like this are why some of these docs are switching over so quickly, once they find out there is an alternate to a group managed by this company they jump at the chance.

Our group is part of the larger physician group that is within the hospital system structure. We are already setting up to negotiate with the payors as a system-wide group. Our anesthesia group is one group and they have the exclusive contract. I have been trying to talk to our admin about giving us the exclusive contract as well for hospitalist services but they are balking, I think because of fear of litigation from this particular management company.

[Moses]

So you're already hospital owned? That's too bad. You could probably make a handsome living on the admin side, but the docs in both groups are very vulnerable. I'm afraid the days of private practice or physician owned groups are finished.

[Nathans_Dad]

Well, now that you mention it, I sometimes get the signal that I am being "groomed" for a hospital admin position, possibly running the hospitalist groups for the hospital system.

I would probably take the gig if offered, good salary, no call, no liability and most weekends off.

[304065]

Originally Posted by Nathans_Dad

I

First off, the other group has no reason to want to merge. They currently control about 60% of the business compared to our 40%. Granted, that is better than when I first came here, but they still have the majority of the business. They are on a per bill compensation method, they get a percentage of what they collect directly as salary. If they admit zero, they get paid zero. They are currently making more money than our group does, we are salaried with a production bonus on top of that if we meet certain goals. Our group is built for long term physician retention and satisfaction, theirs is the classic churn and burn for 2 years and then burn out your docs model.

There is no way our docs would join their group, both from a lifestyle and an ethical perspective, we just have too many issues with the way their physician management group does business. Their docs would have to accept lower salaries in exchange for better lifestyle and would have to deal with the legal ramifications of trying to leave their management group.

Moses is correct: all the incentive they need will be coming from CMS.

Made me laugh out loud, trying to organize docs into an IPA is like herding cats with a hockey stick.

That said, if none of your docs would be comfortable with their operating model then it looks like YOU will be the survivor. Ramp up your marketing efforts and take no prisoners.

[drew1]

I hate seeing you all doctors having to go through this kind of stuff with the hospitals.