Here at DICCF and the Gator Nation are happy to have our great coach back! We pray that Coach Meyer's physical ailments and stress will be taken care of soon.
“Come to me, all you who labor and are burdened,
and I will give you rest.
Take my yoke upon you and learn from me,
for I am meek and humble of heart;
and you will find rest for yourselves.
For my yoke is easy, and my burden light.”
Matthew 11:28-30
Prayers for Coach Meyer
Our prayers are with Coach Urban Meyer and his family. Thank you for all you have done for the Gators. We know it was an extremely stressful job with high expectations. May God bless you and keep you healthy.
What will Happen to a Government Run Health System? Look at Rent Controls
A few decades ago, bureaucrats in large cities such as New York and San Francisco had bleeding hearts for it's citizens. The reason that the lower and middle class could not get "affordable housing", according to these politicians, was that the evil landlords were too greedy and were charging outrageous rents. How dare they make "excessive profits". So the politicians passed rent controls. Rent controls are price ceiling that put a limit on how high a landlord could charge for rent. These were put on apartment buildings that were in neighborhoods of the middle and lower classes.
Now the greedy landlords couldn't raise rents on their tenants, no matter how high inflation, cost of living, taxes and cost of repairs went up. So predictably, the first thing that happened was that repairs were not made by the landlords and the buildings went into disrepair. Next, since the landlords could not make a profit, or even pay expenses, many abandoned the buildings and walked away. The buildings turned into slums and many were vandalized and some burned down. The very people that were supposed to get affordable housing now had nowhere to live. Of course, no one built buildings that would qualify for rent controls, so no new rent controlled apartments became available. Landlords either turned apartment buildings into condominiums or built luxury apartments that were not subjected to rent controls. Of course the cities did build government owned "projects" which of course turned into slums and were riddled with drugs and crime.
This resulted in less housing for the people that the rent control programs were intended to help. The more affluent had more housing choices. This didn't help the poorer city residents because, of course they couldn't afford the luxury apartments. So even though there was housing available, the poor and middle class didn't have access, unless they waited long enough for the few remaining rent controlled apartments or a place in the projects opened up. The wait was usually years and sometimes people had to wait for people to die to get an apartment in the few remaining rent controlled buildings.
Fast forward to the Democratic health care Plan.
The rent controlled apartments and projects are the public option and government run healthcare, the landlords are the private practice physicians and the luxury apartments are their practices. Figure it out.
Now the greedy landlords couldn't raise rents on their tenants, no matter how high inflation, cost of living, taxes and cost of repairs went up. So predictably, the first thing that happened was that repairs were not made by the landlords and the buildings went into disrepair. Next, since the landlords could not make a profit, or even pay expenses, many abandoned the buildings and walked away. The buildings turned into slums and many were vandalized and some burned down. The very people that were supposed to get affordable housing now had nowhere to live. Of course, no one built buildings that would qualify for rent controls, so no new rent controlled apartments became available. Landlords either turned apartment buildings into condominiums or built luxury apartments that were not subjected to rent controls. Of course the cities did build government owned "projects" which of course turned into slums and were riddled with drugs and crime.
This resulted in less housing for the people that the rent control programs were intended to help. The more affluent had more housing choices. This didn't help the poorer city residents because, of course they couldn't afford the luxury apartments. So even though there was housing available, the poor and middle class didn't have access, unless they waited long enough for the few remaining rent controlled apartments or a place in the projects opened up. The wait was usually years and sometimes people had to wait for people to die to get an apartment in the few remaining rent controlled buildings.
Fast forward to the Democratic health care Plan.
The rent controlled apartments and projects are the public option and government run healthcare, the landlords are the private practice physicians and the luxury apartments are their practices. Figure it out.
'Tis the Season
The Martindale Law Group hosted their annual holiday party last week. Thank you for the invitation!
UDI Christmas Party
The annual UDI Christmas party was held this Monday at Circa. Everyone had a great time. A big thanks to Dr. Stanley, Dr. Bagby and Suzanne for hosting us!
Maximizing the Profitability of Your Practice: Value Chain Analysis
Part 1: Inbound Logistics: Cost Reduction
Economic times are tough for all businesses, including many of our medical practices. Our patients are putting off medical treatments for a myriad of reasons, including unemployment and high insurance deductibles. Compounding the issue is the fact that our payers have drastically reduced payments for those we treat.
Since most of us rely on managed care and government insurance for the majority our revenue, we are by definition price takers. In other words, we accept the reimbursement that is contractually available to us and have limited ability to set our prices. Given these challenges, it is essential that we optimize the factors we can control.
Linking Competitive Advantage to Profitability
Let’s examine the concept of the value chain. Harvard professor Michael Porter introduced this concept in the 1980s. The value chain applies to all businesses and can be applied to our medical practices. The basic concept of the value chain is that business processes can be categorized by five primary and four secondary activities, each of which should be maximized to allow for competitive advantage over “rival” companies in one’s industry.
When value chain activities are maximized, so is profitability. Primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and finally, service after the sale. Secondary activities include firm infrastructure, innovation of technology, human resources, and procurement. Here, we will concentrate on the primary activities of the value chain with a focus on inbound logistics.
Inbound logistics deals with the acquisition of the components that we use to run our practices. These include our supplies, vendor contracts, office equipment, and managed care contracts. As profit is the difference between revenue and expenses (costs), it is critical to look closely at the cost component of this equation, especially in light of the diminishing reimbursements we all are facing.
Using the Challenging Economy to Your Advantage
The first thing to consider is that as the business aspect of practicing medicine gets tougher for us, it also becomes tougher for our vendors. You can turn this situation to your advantage by negotiating better deals. Review your contacts with the suppliers and shop around contracts for supplies and services. In order to keep existing customers and attract new ones, these vendors must offer more competitive pricing on their products. Just as we do, vendors currently have to operate at lower margins, but certainly will not proactively give you a break on an existing product; it is up to you to initiate the negotiations.
The Internet is a great tool for discovering and locating alternative suppliers. Because competitors are anxious to generate new business, most will significantly lower their prices. A few hundred dollars per month of savings here and there adds up to several thousands of dollars per year in profit. This could be equivalent to several office visits, surgeries, or procedures.
Next, consider used or refurbished office equipment rather than brand new. For example, computer systems, phone systems, fax machines, copiers and office furniture can be purchased used at significantly lower prices than new, and if procured by a reputable company with a solid track record, these items can perform as well as their new counterparts. It is up to you to conduct due diligence before making such purchases to ensure optimum performance. Also, the service contracts for these products should be put out to bid to find the best value.
Renegotiate with your other vendors, such as linen suppliers, custodial services, and medical waste companies, as well. Many of these contracts were probably initiated years ago before the economic downturn and have not been reviewed in light of the current situation. Over the past year, the author has enjoyed significant savings per month (several thousands per year) simply by changing suppliers of these services.
Become a Bargain Hunter
This isn’t to suggest cutting the quality of our supplies and services, but instead lowering our costs to match current market prices while maintaining good quality. These prices are reflected in the marketplace by simple supply and demand. As demand for these products are decreasing because of the down economy, we as consumers benefit by taking advantage of the lower market prices. However, we have to look for or even ask for the bargains; most will not fall into our laps.
In summary, increased revenue is not the only element of the profit equation. In fact, increased revenue for most of us means higher volumes and longer hours. While this is certainly not always bad, simply reducing costs may be the easiest and most effective way to increase the profitability of our practices in these challenging economic times.
Economic times are tough for all businesses, including many of our medical practices. Our patients are putting off medical treatments for a myriad of reasons, including unemployment and high insurance deductibles. Compounding the issue is the fact that our payers have drastically reduced payments for those we treat.
Since most of us rely on managed care and government insurance for the majority our revenue, we are by definition price takers. In other words, we accept the reimbursement that is contractually available to us and have limited ability to set our prices. Given these challenges, it is essential that we optimize the factors we can control.
Linking Competitive Advantage to Profitability
Let’s examine the concept of the value chain. Harvard professor Michael Porter introduced this concept in the 1980s. The value chain applies to all businesses and can be applied to our medical practices. The basic concept of the value chain is that business processes can be categorized by five primary and four secondary activities, each of which should be maximized to allow for competitive advantage over “rival” companies in one’s industry.
When value chain activities are maximized, so is profitability. Primary activities include inbound logistics, operations, outbound logistics, marketing and sales, and finally, service after the sale. Secondary activities include firm infrastructure, innovation of technology, human resources, and procurement. Here, we will concentrate on the primary activities of the value chain with a focus on inbound logistics.
Inbound logistics deals with the acquisition of the components that we use to run our practices. These include our supplies, vendor contracts, office equipment, and managed care contracts. As profit is the difference between revenue and expenses (costs), it is critical to look closely at the cost component of this equation, especially in light of the diminishing reimbursements we all are facing.
Using the Challenging Economy to Your Advantage
The first thing to consider is that as the business aspect of practicing medicine gets tougher for us, it also becomes tougher for our vendors. You can turn this situation to your advantage by negotiating better deals. Review your contacts with the suppliers and shop around contracts for supplies and services. In order to keep existing customers and attract new ones, these vendors must offer more competitive pricing on their products. Just as we do, vendors currently have to operate at lower margins, but certainly will not proactively give you a break on an existing product; it is up to you to initiate the negotiations.
The Internet is a great tool for discovering and locating alternative suppliers. Because competitors are anxious to generate new business, most will significantly lower their prices. A few hundred dollars per month of savings here and there adds up to several thousands of dollars per year in profit. This could be equivalent to several office visits, surgeries, or procedures.
Next, consider used or refurbished office equipment rather than brand new. For example, computer systems, phone systems, fax machines, copiers and office furniture can be purchased used at significantly lower prices than new, and if procured by a reputable company with a solid track record, these items can perform as well as their new counterparts. It is up to you to conduct due diligence before making such purchases to ensure optimum performance. Also, the service contracts for these products should be put out to bid to find the best value.
Renegotiate with your other vendors, such as linen suppliers, custodial services, and medical waste companies, as well. Many of these contracts were probably initiated years ago before the economic downturn and have not been reviewed in light of the current situation. Over the past year, the author has enjoyed significant savings per month (several thousands per year) simply by changing suppliers of these services.
Become a Bargain Hunter
This isn’t to suggest cutting the quality of our supplies and services, but instead lowering our costs to match current market prices while maintaining good quality. These prices are reflected in the marketplace by simple supply and demand. As demand for these products are decreasing because of the down economy, we as consumers benefit by taking advantage of the lower market prices. However, we have to look for or even ask for the bargains; most will not fall into our laps.
In summary, increased revenue is not the only element of the profit equation. In fact, increased revenue for most of us means higher volumes and longer hours. While this is certainly not always bad, simply reducing costs may be the easiest and most effective way to increase the profitability of our practices in these challenging economic times.
Striving to be a Great Leader
What makes a great leader? What person do we think of when asked this question? It may be someone we are drawn to because of inteligence or charisma. Some imagine someone with the ability to give clear direction during times of frustration and uncertainty. Others think of a person that gives emotional support and encouragement in seemingly bleak and insurmountable situations. All of these are acceptable characteristics of succesful leaders and have been validated in various theories and research.
However, I submit that one should step back and evaluate a leader in terms of the general good that he bestows upon his followers and not just on the grounds of the success of particular projects. Being a great leader is much more than that. A leader should be judged ultimately by the long term value he adds to each of his followers. A great leader transforms his followers by unlocking their potential to perform on a much higher level than they ever though possible. He admonishes the virtuous gift of improving someone else’s life. Most importantly, a great leader enhances his followers’ self-worth and self-image, both of which will allow his followers success not only at future jobs, but also in life as better spouses, parents and friends. To sum it up, a great leader must be a life changer.
In order for a leader to achieve this objective, he has to spend time and effort to really know each suborinate on a very personal level. He must understand their long term goals and bestow his experience and knowledge to give them the necessary tools to achieve them. He must remove obsticles laid by thoughts of past failures which leave them uncertain of their self-value. He must overcome poor first impressions and outward apperences and dig deep to find the good in each person and nurture it. A great leader understands that it’s not about him, it’s about others.
The follower desires a leader with honesty, integrety, and moral clarity. A great leader must be honest in terms of never overpromising or underrewarding. His integrety consists of wholesome behavior on and off the job. His moral clarity is displayed by his understanding of right versus wrong. Only when a follower has trust in a leader will he allow himself to be transformed.
This is the type of leader I strive to be. Remember, as leaders we will touch thousands of people in our lifetimes, but each for a relatively short period. If we are lucky enough to be their “life changer”, maybe when they are asked, “What makes a great leader?” our image will appear in their minds.
