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July 21, 2020 Dealing at the Deadline

July 21, 2020

Dealing at the Deadline

I confess that I enjoy the distractions from real life that sports bring, but COVID has me a bit conflicted. If ever we needed some mindless stuff to talk about that aren’t so heavy, it is now. Loving or hating the Yankees or Cowboys or Lakers would be a relief.

Then again, it is sports we are talking about, not people dying; or caregivers who sleep in the basement to protect their families from the risks of their job; or the one in five people who are unemployed; or the 100,000 small businesses that may close forever.

But these are people and businesses and universities, too.

It makes my head hurt trying to decide if I am for or against.

That said, they are trying to make it happen and since they are, there is an analogy I want to steal.

In major league baseball, the trade deadline generally comes around late July, after they have played about four months. Teams that have a chance of making the playoff are ‘buyers;’ those who are out of it are ‘sellers.’

What that means is that buyers trade the future – young prospects – to the sellers for players in their prime who can help them win now. General managers look hard at their team and decide if they should be buyers or sellers. In this COVID-shortened season they will, virus willing, play only a third of the normal games, so the trade deadline comes quickly. The decision to trade or hold will be even trickier, but no less important.

COVID may have shortened the baseball season, but the pandemic season just seems to be lengthening day by day. Little did we know that ‘by Easter’ meant Easter 2021. Physician practices, like every other business, may not be able to count on the quick return to normal strategy. As such, it may be time to lean back in your chair and ask, ‘Am I good with our situation, our prospects, our chances…or should we be buyers or sellers?’

In the recent physician survey published by McKinsey and Company that we referenced a couple of weeks ago, half of the independent physicians were more likely to consider an employment option than they were pre-COVID. I get it. Getting to a safe harbor now might cause you to tolerate more employment hassles than you would have in the past, though it is worth noting that being employed by a health system did not, is not, may not provide as much security as you might have imagined six months ago.

Conversely, only one in four was more likely to think about partnering or selling now.

Let me encourage you to consider that option a little more. Maybe it is time to be a buyer, or a seller, or both. Maybe this is better than standing pat or just throwing in the towel and taking a J-O-B.

Times like can lead to some moves that create a much better future scenario.

July 17, 2020 False Summits

July 17, 2020

False Summits

My home state of Colorado boasts of 53 14ers, mountain peaks that rise above 14,000 feet. Or maybe it is 58 if you don’t get too technical about how deep the saddle must be between peaks if you want to count them as two instead of one. If you schlepped up there and hit both peaks, count however you want.

For many, collecting 14ers is a life-life pursuit, a badge of honor. My buddy is on a similar mission, trying to see how many of our state’s craft beers he can drink. Some people do both.

Rookie climbers experience the psychological letdown of ‘false summits,’ that belief that you are almost there, only to get to the top of a peak you’ve been eyeing and discover that there is more mountain – sometimes a lot more – left hiding behind it.

You are tired, your friends who told you this would be fun forgot to mention the blisters or how heavy a backpack starts to feel after a while, but you see your goal and trudge on. Then the goal is a mirage that mocks you as the trail continues to ascend to the sky. The real summit is still ahead, or is that another fake one?

I do have one piece of advice for first time hikers from the flatlands, wanting to come to Colorado and bag a 14er for bragging rights back home – take on Mt. Evans. You can drive to the top and the parking lot is about 100 feet from the summit. You don’t have to give all the details when you get back.

But like the hiking, the pandemic come with false summits and those can bring disappointment that must be managed, or it turns into discouragement. That is a battle some of us are facing right now.

Like tired kids in the back seat during a cross-country trip, some are starting to whine, ‘Are we there yet? When will this be over? When will things get back to normal?’

It is a fair question, but repeatedly setting false milestones in this time can do more than lead to disappointment – it also offers a way out from having to face some really hard questions.

If there is a summit, a real one – this one or the next one, that implies, like hiking, that we eventually get to the top, take a selfie, turn around, head down, then resume our beer quest.

But COVID will not work that way, at least not entirely. Some things are changed forever.

So, time for a hard question…is your hope for a return to normal just a way to avoid facing some hard decisions that you need to make to put your practice in position to be healthy in the future?

Sit atop a mountain peak (or just have a craft beer) and ponder.

July 9, 2020 So Why Do We Still Have Car Crashes?

July 9, 2020

So Why Do We Still Have Car Crashes?

How good of a driver are you? Better than average? Excellent?

Of course you are.

I know what you said because most Americans rate themselves as ‘excellent’ or ‘very good’ drivers.

We’re good at driving; math…not so much. Like Lake Wobegon, 90% of the children are above average.

Psychologists could cite us many examples of our overconfidence, but the driver rating serves the purpose here because it is so universal. Even though we admit to driving too fast, driving while tired or even intoxicated, and occasionally texting behind the wheel, most of us still think we’re excellent, especially if we are husbands.

And the accident…never our fault.

I bring this up to continue this line of thinking about our thinking when it comes to navigating our businesses through the restart. Not only are we stumbling blindly down the hill with incomplete data and no friggin’ idea what the fall will bring, much less the next five years, but our thinking is as flawed as our information.

We have cognitive biases all over the place that screw up our thinking, but Daniel Kahneman, the best-selling author who introduced these ideas to the world at large, called overconfidence ‘the mother of all biases.’

We are infected and wearing a mask won’t help.

A recent McKinsey & Company survey found that most physicians believe that a year from now volume will be back to, if not slightly higher than, pre-COVID levels.

As someone whose business depends on the patient volume of our clients, that is awesome news. As someone genetically predisposed to optimism, I’m ready to sign up for the scenario that says, ‘Hey, this is healthcare…we are doctors…this is life and health we are talking about…we’re special…we’ll bounce back first.’

For affirmation, another recent report by the very same smart folks at McKinsey agrees, showing ‘Healthcare and Social Assistance’ as the segment of small businesses that will return to pre-COVID levels the fastest.

Wa-hoo.

But what if we are being a tad optimistic? What if there is just enough fear, just enough friction, just enough governmental brake-tapping to drop things permanently to 90% of past levels? How about 80%?

Not to be rude, but if large numbers of people having a heart attack during quarantine decided not to go to the ER, what makes us think there will be no long-term change in patient behavior? Some stuff can wait, for some stuff just rub some dirt on it, some can be managed through that free telemedicine visit offered by my health plan.

There is one other interesting finding from the physician survey. Pre-COVID about half of the practices had a month or more of cash on hand. The other half either had less (23%) or had no idea how much they had (26%). Now, only 30% have more than a month’s worth (probably inflated by PPP money) on hand.

So, we are very positive in our outlook even though our indicators are flashing a lot of risk.

Yes, we still have car crashes.

June 30, 2020 Probabilistic Permission

June 30, 2020

Probabilistic Permission

Regroup, restart, reinvigorate, recalibrate, rethink, reinvent.

Sounds like some weird game of Scrabble.

These ‘re’ things are what we are all up to, but I want to come back to the one we discussed earlier this week – rethinking, particularly when life now requires us to question something that we’ve long held to be true.

There are several reasons why this is hard for us.

Ego is one. Admitting that we need to rethink that means we might have been wrong. You might have been wrong, but me? Noooo.

Success is another. The more our past thinking worked well, the harder it is to change it now. This is why generals keep fighting the last war. Today’s generals were the successful colonels and majors in the last war, and they did not get promoted because they died. They won.

Another is the sheer magnitude of the work that comes with a change in thinking. Everything was built on the old idea. Alter that and we have a heavy lift to redo everything that is now obsolete. Let’s keep believing the world is flat and just go get lunch.

There are other social and psychological forces for the inertia of beliefs – peer pressure, culture, reputation, the fact that we got everyone T-shirts emblazoned with the old mantra.

But there is one unique thing that we should get on the table, one we don’t think about but an idea that might make changing our mind easier.

Most of us, most of the time, tend to hold our truths in black or white fashion. Something is true or it is not. Our brains operate in binary mode – on or off.

Consequently, if we are asked to rethink something we held to be true – say a patient’s loyalty to their personal physician or how we think about different types of patient visits – and our only option is a complete rejection of what we believe, we are going to work really hard to defend the status quo. All the reasons above kick in together.

Viva la resistance!

How do we overcome this?

One way is to work instead to think – and communicate with one another – more probabilistically. Instead of ‘yes/no’ we frame our position in terms of ranges, levels of confidence, or percent of a chance.

If I ask you if your patient volumes in October will be back to last year’s level and your only options are ‘Yes’ or ‘No,’ once you take a position, it is harder to change.

But if I ask you, ‘What is the likelihood that patient volumes will get back to our baseline this fall?’ and you say ‘75% – plus or minus 5%,’ then it is a lot easier – cognitively, psychologically – to revise your estimate up or down later as new data arrives to inform the question.

We are guessing at a lot of things right now. If we admit that, and use language accordingly with ourselves and our colleagues, we will be able to rethink, learn and grow much faster.

June 23, 2020 Are You Sure?

June 23, 2020

Are You Sure?

The older I get, the less I know.

I am not sure if that statement is an indication of humility delivered by being wrong a lot; the effect of having teenagers who tell you what a cultural dolt you are; or the natural aging process that wipes out thousands of neurons everyday literally reducing what you know.

I’ll claim all the above and gladly admit that I know less than I used to know. Granted, at one point I was a know-it-all, so had nowhere to go but down.

Life seems to work that way. We amass a little learning; a little experience and we end up with a long list of things we just know to be true. We build our world around those ideas. We are confident.

Then life – people mostly – happens and things don’t behave like we believe they should.

Growth comes when we step in a pile of knowledge failure. What we were so sure of didn’t survive contact with reality. Anyone who doubts this doesn’t have kids. Or a dog.

That is not entirely true. Many people have experiences that don’t jive with what they ‘know’ and they double down to protect their erroneous belief, offering more and more elaborate rationalizations, amendments and denials in order to explain away the facts so they can hold on to their truth. This does not lead to growth, unless we are measuring the thickness of the skull.

But when what we held to be true, not up for debate even, runs into more than just an odd anomaly we are given a moment in which we have the opportunity to learn, change and grow.

One thread that ran through my reading during the quarantine related to decision making in the face of uncertainty. From poker bets to earthquake predictions to political polls to economic forecasts, we constantly face situations that require us to form an opinion from less that complete facts and then decide. The problem is that we quickly forget that we didn’t really know for sure. Our hypothesis, often pulled out of our ear or another bodily orifice, becomes a factual given in our mind very quickly.

We are confident, but not humble.

Then COVID comes along and blows up many things we thought we knew for sure. We could make a long list of things we knew in February that are not so sure about in June, but the ones that matter for our discussion here relate to healthcare and physician practices and the mindset of patients. That list alone is long.

As we get started recreating, the first question is about how we deal with the knowns that have now been challenged.

Will we construct complex arguments to keep us from having to do the hard work of changing our mind, and all that goes with that?

Or will we ask the hard question – Is what I thought I knew to be certain no longer true?

The future of our businesses depends on our answer.

June 18, 2020 Obsolete Maps

June 18, 2020

Obsolete Maps

[Part Three in a series. Click here for Part One and Part Two.]

As I have been reflecting on my great-grandfather’s losing battle with the rising Arkansas River in 1943, I realized that as a now ‘city boy’ (according to my redneck brother) I don’t naturally think in acres. Blocks, neighborhoods, interstate exits – these are my geographic frames of reference. Acres are not as natural for me as they should be for someone with farming roots.

In that flood, 450 acres forever disappeared underwater as the river changed course. My 24-home typical suburban neighborhood sits on about 10 acres, so 45 of those. A square mile covers 640 acres, so about 70% of that.

Gone.

Forever.

Here is where we get to the really hard part of the coronavirus reality. Not the part about short-term pain or inconvenience or the challenges in restarting, but the part where we stare hard at the situation and ask, ‘Is it gone forever?’

Last weekend I was happy to plop down in the booth at our favorite Mexican restaurant for an enchilada and a margarita. But in about 30 seconds you realize that despite their best efforts, the math just doesn’t work.

I flew for the first time yesterday and while I enjoyed having a row, or seven, to myself with room to spread out, the same math was easy to do. As it was at the hotel. And many other places you see.

Many just won’t make it.

Their business is, or is sliding toward, the bottom of the river.

Surely this can’t happen to physician practices, right? I mean, we’re talking doctors here, superheroes in white lab coats. Wasn’t there some implied and unspoken promise for surviving med school?

Devastating floods and microscopic killers are indiscriminate.

The prognostications on physician practices that will close shop, particularly small practices and especially primary care, are blaring everywhere. That has not yet happened at a doomsday level and maybe the soothsayers got a little carried away. Or maybe PPP loans and Medicare advance payments propped up some dead practices that just haven’t fallen over yet.

I recently spoke with some folks who work with a lot of small practices and they are optimistic. Maybe it was their unique market, maybe it was more hope than realism. I’ll hang on to their take as we all want some good news.

But the math of business applies to physician practices, too. Take enough volume out for long enough and it ends up under 25 feet of water.

Well, that was cheery, wasn’t it?

Dan Dan might tell us there are two options: quit farming and move on, or you better work the land you have and maybe go find some more.

This is where we’ll be focusing in the weeks to come. You’re going to hear things you’ve heard from me before, only with more urgency. You’ll hear some new thoughts based on our new reality. But I assume you still want to keep farming, keep practicing medicine and taking care of patients.

So, let’s get after it.