From Steelworkers to
Surgeons: Gainsharing and Physician
If you can make a hospital or other
facility a dollar by cutting its costs, you can keep 50 cents. Or
That, in a nutshell, is what’s
described as “gainsharing,” an old concept that had its genesis in
other industrial settings. One of the earliest cited examples is a system
designed in the 1930’s by a union official named Joseph Scanlon in order
to save steel workers’ jobs. The “Scanlon Plan” encouraged
workers to adopt more efficient production methods by giving them half of the
Gain sharing as a concept in healthcare
has had its regulatory ups and downs. But, lucky for you, it's now back and
ready as ever to be your own personal vending machine: put efforts in and out
pops money. Under the right circumstances, of course.
And, the timing is right. As hospitals
push to reduce or eliminate stipends in order to "cut costs,"
gainsharing proposals are aimed to enter what famed early 20th Century
advertising genius Robert Collier called "the conversation in your
customer's mind." Hospital executives want to reduce costs. You give them
what they want and share in the rewards. Hey, even for someone (me) who thinks
the concept of win-win is mostly B-S, gainsharing is a tremendous psychological
and financial strategy.
Note that gainsharing is not, but could
be, profit sharing; the system need not have anything to do with
profitability. Although it’s generally keyed to lowering costs, it
can be linked to any number of factors, including quicker performance,
exceeding quality baselines and the like. Finally, gainsharing is not
individual-specific; rather, it is applied to groups (not necessarily all
within one legally defined group), the aim being to modify overall behavior,
and therefore output, however measured.
From a regulatory standpoint,
gainsharing triggers a number of regulatory hurdles, from the Civil Monetary
Penalty Statute in regard to inducement to reduce or limit services, to the
Anti-Kickback Statute, and to Stark. But none need be insurmountable.
Importantly, the concept of gainsharing
can be applied in many circumstances, both by hospital-based and office-based
For example, in the situation described
in OIG Advisory Opinion 07-22, a hospital agreed to share a percentage of the
its cost savings with an anesthesia group. The underlying gainsharing program
related to reducing the cost of anesthesia services during cardiac surgical
And, for example, in the situation
described in OIG Advisory Opinion 08-09, a hospital agreed to share savings
with several groups of orthopedic and neurosurgeons. The savings related to
changes in the physicians’ operating room practices and to the
standardization of spine fusion devices and supplies.
Gainsharing strategies can be structured
in a pure, straightforward manner. In other words, as freestanding gainsharing
But, importantly in the larger context,
they can be used as a tool in structuring a monetary split in a variety of
other contexts, such as within an exclusive contract or as a part of a
The time is right for you to consider
gainsharing as one of the important tools for your success. The regulatory
climate is right. The psychological climate is right. The money’s okay,
too. If you like money, let’s talk.
Wisdom. Applied. 108 - Physicians Must
Brand Their Role in Healthcare or Suffer the Consequences
As hospitals quicken their pace to
replace physicians with paraprofessionals, physicians must brand their role in
healthcare or suffer the consequences.
2018 New Year's Un-Resolutions
We all make New Year’s
resolutions. "I’ll do this or that!” Then January 5th rolls
around and, well, you get the idea.
In keeping with our E-Alert New
Year’s Tradition, here’s the hack. Flip things around: What will
you not do, or stop doing, next year?
Here are some suggestions for
1. Stop yearning for a return
to the golden past; it wasn’t golden and it’s not coming
2. Stop putting all of your
eggs in the basket called a hospital. Hospitals, as we know them, are an
endangered species in a world in which diagnosis, treatment and care is quickly
moving to outpatient facilities and into patients’
3. Stop believing the hospital
CEO, ASC administrator, deal partner, or other promoter who says the deal
“has been vetted by my lawyer and it’s perfectly legal.” If
the deal involves you performing services without fair market value
compensation, has you receiving a fee per adjudicated script, has you giving a
discount, allows someone else to resell your services, or (and this should be
obvious) has you paying them a fee per patient, consider how you’ll look
in an orange jumpsuit.
4. Stop aiming simply for
so-called “best practices,” which, if you think about it, is all
about doing what other people do, which then leads to mediocrity.
5. Stop reacting to others’
proposals. Become proactive and lead with your own strategy, not simply
6. Stop settling for less.
Don’t believe those who tell you that you have to lower your
expectations. Set them as high as the stars. If you don’t, you’ll
regret it sooner or later.
Oh, and one regular resolution:
Resolve to have a very happy, healthy, and successful New Year!
Recently Published Blog
Feel free to forward this newsletter to
your friends. They can sign up for their own copy here.
you're ready, here are 4 ways I can help you and your
1. Download a copy of The
Success Prescription Book.
My book The Success
Prescription provides you with a framework for thinking about your
success. You can buy it on Amazon or, for free, download a copy of the
2. Be a guest on “Wisdom.
Although most of my podcasts involve
me addressing an important point for your success, I’m always looking for
guests who’d like to be interviewed about their personal and professional
achievements and the lessons learned. Email me if you’re interested in participating.
3. Book me to speak to
your group or organization.
I’ve spoken at dozens of medical group events, healthcare
organization events, large corporate events, university-sponsored events,
and private, invitation-only events on topics such as The Impending Death of
Hospitals, the strategic use of OIG Advisory Opinions, medical group
governance, and succeeding at negotiations. For more information about a
custom presentation for you, email my Santa Barbara office staff.
4. If You’re Not Yet a
Client, Engage Me to Represent You.
If you’re not yet a client, and
you’re interested in increasing your profit and managing your risk of
loss, email me directly. I’ll contact you to set up a
call or meeting.
Mark F. Weiss
The Mark F. Weiss Law Firm, a Professional Corporation
SANTA BARBARA OFFICE:
1227 De La Vina Street
Santa Barbara, CA 93101
Tel: 805 695 8107
LOS ANGELES OFFICE:
10940 Wilshire Boulevard
Los Angeles, CA 90024
Tel: 310 843 2800
8150 N. Central Expressway
© 2017 The Mark F. Weiss Law Firm, A Professional Corporation
NEW BOOK OFFER
Success. Even more success. It’s
what you want. Welcome to the club, which appears to be getting more exclusive
every day, not due to evolution but to self-selection. Of course, sometimes we
get stuck, or at least delayed, by the problems that pop up, blocking the way.
But for many, the problem is that they don’t know what the problem is.
I’ve been working with medical group leaders with the aim of increasing
their group’s profits and managing their risk of loss for over 30 years.
Does that mean that I have all of the answers? No. But what I do have is a
point of view, a way of thinking about your success. So go ahead and start
reading now. No one is going to do it for you. Which, by the way, is thinking
tool number one.
Having fallen for the fallacy that
there’s profit in market share, hospitals have gorged on acquisitions and
on employment and alignment of physicians. Many physicians have been willing
participants through practice sales and in the belief that there’s safety
in hospital employment. But it’s becoming evident that physician
employment leads to losses and that integrated care delivers neither better
care nor lower costs. And now, technology is about to moot many of the reasons
for a hospital’s existence. How can your practice survive and even thrive
in the post-hospital world?
Some days, it seems as if
everyone, from anesthesia groups to vascular surgery practices, is talking
about selling their practice to a larger group, to private equity investors, or
to a hospital.
The reality is that some practices can
be sold, some can never be sold, and some have nothing to sell. The reality also is that there are a number of
strategic alternatives to a practice sale.
A perfect storm of factors is
accelerating the market for hospital-based medical group mergers and
The healthcare market is changing
rapidly, bringing new sets of problems. How can you find a solution, how can you engage in the right
development of strategy, and how can you to plan your, or your group’s,
future without tools to help clarify your thinking?
Directions is a collection of thoughts
as thinking tools, each intended to instruct, inform, and even more so, cause
you to give pause to instruct and inform yourself.
If you're an independent
learner or need a refresher on a current topic, click here to find out
about our growing list of Knowledge Products.
Recent Interviews and Published
Has the recent expansion of ASCs caught your attention? Read more in
Mark's article, New Codes Drive Growth for Interventional Surgical
Centers, published December 2017 on AuntMinnie.com. Read or download here.
Are you prepared for
guerrilla warfare? Mark's article, The Flea That Killed the
Medical Center CEO: A Cautionary Tale, published in the Fall 2017
issue of Communique. Read or download here.
Mark's article, How to Prevent
Your Medical Group From Getting Robbed of its Staff, was published in
the Summer 2017 issue of the Pennsylvania Society of Anesthesiologists'
magazine, Sentinel. Read or download here.
Read some strategies for the inevitable
Hospital CEO turnover in Mark's article Hospital CEO Turnover:
What You Must Know and Do to Protect Your Anesthesia
Group featured in the summer edition of Communique. Read or download here.
Mark covers the trend of hospital based
care an article entitled The Impeding Death of Hospitals: How to
Help Your Clients Survive featured in Today's CPA. Read or download here.
Why Your Compliance Efforts May Be Worthless was published in
the Spring 2017 volume of Communique. Read or download here.
Mark was quoted in the
article ASC Regulatory Areas That Developers Need To Pay Attention
To published on Nov. 9, 2016 in The Ambulatory M&A Advisor. Read or