Outsourcing Healthcare

If you didn't like the idea of sending automobile manufacturing jobs to China, you're really going to hate sending healthcare jobs to Mexico.

A recent report from the Economic Policy Institute says American companies have created 1.4 M jobs overseas this year, compared with fewer than 1M in the US. Those overseas jobs would have lowered the unemployment rate to 8.9%. This, in part, explains why corporate profits are rising, the stock market is at a 2 year high, but the US unemployment rate  stubbornly approaches 10%.

The same is happening to healthcare jobs. With the global demand for quality care mirroring the rise of the middle class in emerging nations, foreign medical doctors and nurses decide to stay in China, India or Brazil. I call it pre-sourcing. Why come to the US only to find out that you had a better opportunity at home? What's more, despite a predicted manpower shortage , places like NYC are making it harder for 3rd and 4th year students at foreign medical schools to do clinical rotations in their hospitals. Telemedicine and medical travel, growing to a 1B industry by 2012, is also leveling the playing field and enticing US doctors to go overseas to practice either full time or in locums placements. Exploding expatriot retirement communties in Mexico, Costa Rica, Panama and the Caribbean are singing an irresistable siren's song attracting medical talent to those balmy shores to care for local patients and aging Americans who want care closer to their new homes.

And, it is not just doctors and nurses going abroad. Demerol dollars are following them. Take, for example, the idea being floated that Medicare pay for cheaper, similar quality care outside of the US for retired Americans...at a price that's 50% less. If that idea doesn't get your blood boiling, how about allowing Medicaid patients the option of choosing less expensive care in Latin America or Asia, in their native language?

The economics of medicine is fundamentally no different in one part of the world than in another. Money and people flow to where they are treated best. Companies hire people and build plants where the demand is the highest and the profits most attractive.

Did you ask for Rosetta Stone software for Christmas?

How Doctors Can Double Their Income

As a physician, you're trading time for money.

Most physicians are no doubt very adept when it comes time to academics and being “book smart”. We all had to get great MCAT scores and high grades to get into medical school. However when it comes down to financial planning or building wealth, it’s not overstating the case that our preparation was a bit lacking. Medical school didn’t prepare me very well for finances,entrepreneurship, let alone running my own practice.

As physicians, when it comes down to it, we are exchanging time for money. The amount of money a physician can make is generally in proportion to how much patients we see or procedures we do. This is no different then the majority of the population who earn wages for a living.

The unfortunate aspect is that for us to double income, we generally have to see double the amount of patients. And as reimbursement continues to dwindle, we are now having to see more and more patients to get the same amount of income, in comparison to five to ten years ago.

So what are our options? For physicians who want to maintain their current nest egg, they need to start building passive or residual income to work for them. Indeed, many physicians have resorted to passive income (in the form of investing, real estates, buying bonds, etc), or started “side careers” or investments (In fact, many of my ER doc friends have run anything from owning their own tavern, to daytrading, even starting your own winery! There’s a reason why Business Pitch section of the AMA news, a series that highlights physician side careers,  seems to be one of the most popular columns.

One great way to build residual income, is entering the domain of online health consulting and medical publishing.  No matter what you decided to do, building residual income to work for you will be more imperative for physicians in the near future. Starting early is the key.

How To Get Rich In Medicine

Take a lesson from Trinidad Colorado. Sell the shovels, don't be the miner.

Trinidad ,Colorado, located in the Southern part of the state on the Colorado side of Raton Pass, was, until recently, the "sex change capital of the world". More sex reassignment surgeries were done there than any other city, until recently when the surgeon left to take a job in San Francisco.

Trinidad , pop 7300, has a long, illustrious history. It grew up as a trading post along the Santa Fe Trail, one of the 3 primary "trails" in early 1800 America, that connected Independence, Missouri with Sante Fe, then part of Mexico and was a major trade route. The Trail provided entrepreneurs with two ways to make money. The first was by providing a way for people to do business or mine coal. The second was to sell things to the people who were doing the business or mining coal.

For example, the growth in traffic along the trail attracted Jewish merchants from the East Coast and Europe who saw a business opportunity providing goods, tools and supplies to Sante Fe Trail users. In 1883, they built Temple Aaron, now the oldest synagogue in continuous use in the state ( http://www.smallsynagogues.com/trinidad_co.htm ) The geneological connection to prominent Denverites exists to this day.

If you are looking for an opportunity, consider selling the tools to make the product, not the product itself. For example, there is tremendous interest in companies producing high speed automated DNA sequencers that will be able to deliver the $1 genome and provide an important tool to drive the personalized medicine revolution. Another company, Sharklet  (http://www.sharklet.com) is using a shark-skin like material that is bacterial resistent to coat medical devices, and, interestingly, the bottom of US Navy ships to prevent the accumulation of barnacles and other organisms that create drag on the hull.

Wars create fortunes. Be the guy who sells the bullets, not the soldier.

Finding The Non-clinical Sweet Spot As A Physician

Your goal is to pinpoint the intersection of what you are good at, what you enjoy, and whether it will reward you enough.

Readers of this space by now know about  the opportunities available to doctors looking for non-clinical careers or as a supplement to their medical practice. Examples include:

• Technical writing
• Science writing
• Publishing
• Broadcast journalism
• Venture capitalist
• Investment analyst
• Investment Banker
• Business Development professional
• Entrepreneur
• Consultant
• Regulatory Affairs Profession
• Patent Agent
• Clinical research scientist
• Technology Transfer professional
• Corporate communications
• Biomedical sales and marketing
• Executive search professional
• Policy Adminstrator
• Research Funding Administration
• Government Agency Administrator
• Business Information Services
• Accreditation surveyor
• Blogging
• Medical editor or reviewer
• Internet expert
• Medical social networking guru

Finding the right slot is a three step process designed to find the right fit.

Do a personal inventory and asset map

Take some time to figure out what makes you happy. Here's an exercise that might help. Go through your old family photos and pick one that shows you doing something with a smile on your face when you were 8 years old. Psychologists tell us those feelings persist, but might get buried as we go through life. Try to resurrect them.

Learn more about what you think might interest you

The second part is about doing research on the many opportunties and experimenting with low risk ways to try them. Don't think about being something. Focus on doing something.  If you want to be a writer, write. If you want to be an investor, invest. In addition, use your networks and secondary resources to try to understand a "day in the life of ________".

Find the right fit

Finally, the third part is about finding the fit between what you like and do best and the opportunity to do it.  Getting the experience requires persistence, continuous learning and changes to your schedule that will give you the time to practice you new art. After some time, figure out whether it make sense to continue or to move on to something else. Remember in medical school how you hated OB-GYN after 5 minutes on the labor and delivery deck? Or, maybe the thought of looking up someone's nose all day long didn't make sense? Move on. Unlike medical school, you can take as many rotations as you'd like to .

A best selling psychologist with an unpronounceable Polish name made his career describing "flow", that mental state of total focus, like  a world-class golfer during a record breaking performance. Relax, keep your head down, your left arm straight, and enjoy the zone.

Physician Business: The Perfect Model

If you're designing a business as a physician, what will you need?

We all know certain questions will be on the board exams. When it comes time to take the orals for the Board of Physician Entrepreneurs exam, count on this one:

A business model describes the interaction between your suppliers, your custmers and your business and how you will make a profit. The following is an example of a near perfect business model:

1. Alessandra Ambrosio in a push up bra.
2. Mark Wahlberg in his briefs
3. My healthclub
4. Someone sending you certified checks to a post office box

There are several elements to the perfect model.

Network effect

Viral

Natural monopoly

No inventory

No COGs

No supply chain

Your customers do your marketing for you

Your customers do fulfillment for you

http://www.dramatispersonae.org/PerfectBusinessModel.htm

Or how about :

A killer application - Exactly meets the target market’s needs in a way that no other offer does. If possible it is twice as good at half the price of current offerings. e.g. matchmaking sites, email, Instant messaging.

‘Bleeding obvious’ - Obvious benefits to the market prompting the response ‘Why didn’t I think of that?’ - e.g. pre-packaged fresh squeezed juice at railway stations.

Price is not an issue  - Price is not an issue because the target market totally sees the value and have the means to buy the product without hesitation. – e.g. high fashion, plastic surgery.

Price is not calculated based on costs - Huge margins – in a 'bricks & mortar' business you buy for 1 sell for 10. Price is based on what the market is prepared to pay not as a markup on costs – e.g. Fine dining in a top restaurant for an anniversary.

Minimal initial personal investment - Either it is a low investment venture or funders will put up 90% of the money for a 10% stake – e.g. internet business or sell under license.

Pent-up demand - Customers have been waiting for some time for someone to finally offer this product. No need to educate the market with expensive advertising or employ copious sales people – e.g. online airfare booking and payment.

Lasting window of opportunity - Plenty of opportunities for repeat business or there is a steady stream of new customers each year. The product is not a fad or dependant on a technology that will soon be superseded.- i.e. best coffee in the city or education products for school leavers.

Highly addictive - One purchased your customers cannot imagine life without it – e.g. iPOD.

Significant competitive edge - You have something exclusive that no other business has access to. e.g. Patent, exclusive agreement with unique resource (supplier, person, materials), skill & know how, exclusive access to a special market)

Monopoly - You have a monopoly in a target market that is completely supported by your customers. – e.g. only hotel in town with a liquor license.

https://www.quora.com/Business-Models/What-is-the-perfect-business-model

Before the Internet, I would have answered 4. Of course, with PayPal, Groupon, virtual gaming points and instant credit, who needs checks any more? Think about how the healthclub model works.

You are so guilty about slacking off for the entire year, you decide to pay an up front sign-on amount for the privilege of belonging. What's more, you give the club the right to automatically take money out of your checking account and send it to the club whether you use their product or not...which, according to research , you won't by March 1. Is this starting to sound a little like concierge medicine?

One of the top 10 reasons why businesses fail is an inadequate business model. Either you don't get your money after the sale  (fee for service) in time or you have to pay your suppliers in advance (EMR vendors).

Creating a business that has a drop dead value proposition that satisfies a huge unmet need is only part of the equation. You need a business model that works. Just ask the owner of the Cherry Creek Athletic Club parked in his Mercedes in his personal space.

Stranger In A Strange Land: The Reality Of Moving To A Small Town

How does a physician decide to downsize and move from the city to the sticks?

The year was 1998. We had sold our multi-unit outpatient business and were leaving Orange County in Southern California for the Mendocino Coast of Northern California.  We scheduled a meeting to meet with our new accountant.  When my wife and I sat across the desk from the CPA, he looked up from the paperwork and said, "So let me get this straight. You're selling your medical business, you're retiring from clinical practice, you've moving to a different region and you're building a new house - all simultaneously.  Any of those stressors land most of my clients in divorce court and you're planning on doing four at the same time! Are you sure about this?  (That's what he said...what he was thinking was "Are you two crazy?")

We looked at each other and smiled. I informed him that after running a 75 doctor-employee business 24/7/365 for 15 years,  none of these new challenges would defeat us.  Since then, every year around April, we talk, and he asks me if we're still proving him wrong. Fortunately, the answer has consistently been YES.  

So we continued the process of making the big move.  We decided to throw ourselves a retirement-bon voyage party.  Since I was sure most of our friends and family had no idea where Mendocino was, I posted a map of Northern California and highlighted the Mendocino Coast.  I knew we were moving from the intensity of the suburban sprawl that is Orange County, and moving to a rural area where our new home town of Little River has a population of 600, but the gifts we received were almost comical.  Farmer John overalls, knee high boots, giant yellow rain slickers - you think we were moving to another planet!  In reality, over the years, we ended up using them all. 

The big day drew closer.  I met with all the local doctors that we had referred to over the years.  Every one of them told me that I was sort of their hero, and wanted to follow me into clinical retirement and out of Southern California.  I smiled my "Aw Shucks" smile, but inside I kept thinking..am I making the right move? All of our friends and family were here. We knew NO ONE up north.  Neither of us had ever lived in a truly small town, in a rural area, 3 hours from an airport!

But we had decided that the crowds, the traffic, the pollution, the crime, etc., etc. were not what we wanted anymore, and most importantly was not where we wanted to raise our son, who was 8 at the time.  We timed our move during the late summer so that our son could start the new school year on time.  We had the garage sales, the tearful goodbyes, the piles of "keepsakes" that were now in the garbage pile.  We hadn't sold our Orange County house yet.  I still had a month left to my clinic directorship contract.  But the time had come.  We drove our two cars down our street behind the moving van, waived to our neighbors, and we were on our way.  Next stop - the wilds of coastal Northern California!

Eight hours after leaving our Southern California home, we crossed the Golden Gate Bridge - just 3 more hours and we would arrive in our new home - Mendocino, on the coast of Northern California.  We had sold our business, vacated our unsold home, packed our worldly goods and were headed to a rural area where there are no traffic reports on the local radio stations.  

In case you were wondering how we decided on our new locale.... the answer was - we just took a chance.  I had never heard of Mendocino and my wife had seen the movie, "Same Time, Next Year" (which was filmed in our new home town) and thought that it would be a nice place to live.  So four years before the move, we had flown to San Francisco and rented a car and just started driving the costal highway north.  I wanted mountains and forests and my wife wanted the ocean.  About 3 hours north of the Bay Area, we came upon the Mendocino Coast and it was love at first sight. Redwood forests coming down to the ocean, dramatic cliffs, and charming New England style houses.  

We first fell (no pun intended) for a coastal bluff property, but woke up that night in a sweat, thinking of all the possible instant death scenarios for our young son.  So we called the realtor and told her we needed to move our search to the inland side of the coastal highway. She replied that she thought she had just the place.

Yes, love at second sight! The parcel she showed us was about 24 acres of spectacular ocean-view property with meadows, forests and deer.  We purchased it 3 weeks later, and then it took four more years to sell our outpatient clinics business and get ready for the move that would change our lives.

Now, it was 1998 and we drove into the little coastal hamlet that is Mendocino Village.  The house we were going to rent while we were building our dream home, wouldn't be available till the next morning.  So we figured we would just rent a motel room for the night.  But apparently the annual regional soccer tournament was that weekend, and there was literally no room available for miles.  We then dragged our weary bones to the house of what would eventually be our neighbors.  We knocked on the door, explained who we were and asked if we could spend the night. They welcomed us in and we collapsed in their guest room.

What began the next day was an adventure that would shape all of our lives.

Exiting Your Business Takes A Lot Of Thought & Preparation.

Pulling the Rip Chord.

We've all taken care of terminally ill patients. For some, their departure is elegant, respectful, planned and peaceful. For others, there are uncomfortable family confrontations, arguments about DNR requests in the ICU, prolonged agony and  money wasted on futile care.  When appropriate, we all advise patients and their families to sign living wills, assign durable power of attorney, certify DNR requests and plan for the end. Doctor, when it comes to your business, follow your own advice.

Stephen Covey, in his best-seller, The Seven Habits of Highly Effective People,  reminds us that highly effective people plan with the end in mind. The same holds true of business owners. Unfortunately, after spending a lifetime building and operating a business, some owners spend more time thinking about how they will get rid of their golf clubs, or their spouses,  than their business. Exits are a key part of business planning and can take the form of IPO's (Initial Public Offerings), ESOPS (Employee Stock Option Plans), MBO's (Management By Outs) , LBO's (Leveraged Buy Outs), M & A's (Mergers and Acqusitions) and EOTUTS(Every Other Thing Under the Sun).

Think about selling your business like you would selling your house or selling your practice. There are several basic stages and things to do:

1. Define your objectives: Whey are you selling your business and what do you want to get out of it?

2. Prepare your business for sale: As any of you who have tried to sell your house recently knows, you will need to spiff it up as best you can, creating curb appeal, painting, fixing the neglected odds and ends, to get it in tip-top shape. The same holds true for your business.

3. Find the right buyer: Who will be interested in buying your business and why? Strategic buyers, financial buyers, private equity groups, employees, management?

4. Get the Deal Done: Who should you consult to help? What due diligence needs to be done and by whom?

5. Now what? What will you do with that pile of cash, all that free time , and the people who are now your best friends?

There is a section of every business plan that describes the exit. My favorites are the bold and the beatiful approach:  "We plan to be acquired by the biggest pharmaceutical company in the world for our game-changing, world-class, outrageous value-added products" or the subtle, self-effacing approach:"We just want to build a nice little company and see what happens". Of course, whatever you say, most everyone knows it won't work out that way. Whatever happens, do some exit planning so you don't wind up screaming at your business partner in the ICU.