Lucrative Practices—SoundPractice Podcast Interview

By SoundPractice
April 7, 2022

Starting and owning a well-run, successful practice are two of the most rewarding activities in which a healthcare professional can engage. However, staying ahead of the curve in our ever-changing industry environment can feel burdensome and can be disheartening. The fact is that at the end of the day, clinicians are trained in their science, not in business. This can ultimately result in a costly, inefficient, trial-and-error approach to practice management.



Mike Sacopulos: My guest today is Michael Spellman. Dr. Spelman is a licensed psychologist and has served as chief of staff for several South Florida hospitals. Dr. Spellman is the author of the recently released Lucrative Practices: The Comprehensive Handbook for Healthcare Executives, published by the American Association for Physician Leadership. Michael Spellman, Welcome to Sound Practice.

Mike Spellman: Thank you. Glad to be here.

Mike Sacopulos: Let’s talk a little bit about your book, Lucrative Practices. What inspired you to write a book that covers so much waterfront; is so comprehensive?

Mike Spellman: I've always wanted to write this book. Physicians, as you know, are very well trained in medicine, and tend to be minimally trained in the business. I wanted something for private practice folks in particular, but also physicians working in facilities with managerial responsibilities. They need to have a broader base from which to make their decisions and guide their careers. I've been a practice consultant for 30 years, and I had this collection of consistent and common questions that people have brought to me. These problems are consistent across practices.

I've had a whole collection of those issues and I thought it would be worth putting those into some usable form for those who are trying to make a living in healthcare. The world is changing. The healthcare marketplace is no longer what it used to be. The rewards are not commensurate with training and the pressures from third, fourth, and sometimes fifth, parties are phenomenal. The whole game has profoundly changed. It's important to know where we’ve come from, so physicians can best predict where they are going.

Mike Sacopulos: How did you become this deeply involved in the business side of medicine?

Mike Spellman: Every misfortune has the potential to turn out very, fortunately. I had a bunch of misfortunes early in my career. I was among the first group of interns admitted, from psychology to internships at Parkland, in Dallas as part of Southwestern medical schools’ effort to integrate behavioral health. I started my career very early on in medical settings. I went from there into a position that was not intended to be a C-suite level administrative position, but for reasons, I won't bore you with ended up turning into a C-suite position. I ended up helping to build a hospital and then managed that hospital for a time thereafter. So very, very early in my career, I got embedded in the medical community, probably a bit more deeply than the psychology community. I got embedded in healthcare management far more deeply than I ever imagined during my training years and ever since then, as I said, I've been a practice consultant.

I've consulted for everything from solo practitioners, all the way to a major multinational hospital holding corporation. I have the breadth and depth. And I bring a psychologist perspective. I've got the businessman's kind of the point of view, but I'm always considering the psychologist's point of view. You know, you can come up with a good policy, a good system, a good procedure, a good training module, a good whatever. But if you don't have the human factors in there, you're not going to get the gains that you potentially could.

Mike Sacopulos: Your book, Lucrative Practices is in an interesting format. You look at relationships to patients, relationships to insurers, and so forth. I wouldn't think that that's a standard or traditional mode of organizing a comprehensive text on the topic. How did you come about going with the relationship as the foundation?

Mike Spellman: Certainly, the starting part of my answer to that would be the psychologist's bias. Psychologists do take a look at how both individuals, couples, and organizations related to the world around them and others. Looking beyond that initial bias, when I tried to factor analyze, not statistically, but in my head, the common factors there involved some attention to relationships. Partnerships, for example, where folks who were struggling could have built partnerships, joint ventures, or other relationship-based interactions that would've put them in a more lucrative position.

Before I make recommendations, I think of relationships. It just makes sense. Every industry is having their problems with personnel. Some of that has to do with factors that were in the control of the employers, myself included. COVID-19 changed people's perspectives. We have the great resignation going on, but I think if we had handled our relationships with our employees a bit differently on the front end, we wouldn't see such a drain of talented folks leaving the workplace.

Mike Sacopulos: Dr. Spellman, I’m interested in this drain of people resigning. Can you give our audience some suggestions or a deeper explanation as to why we're facing this current situation?

Mike Spellman: When I talk to folks who have left their jobs, some of them are for economic reasons. Some of them combine several reasons, other than burnout, but a lot of them say burnout.

And when I talk to employers, you know, they're burned out too. So what we have are the people who are supposed to be providing the wind under my wings, so to speak, trying to flap their wings so hard to get through 2020. They weren't adequately attending to the needs of their employees. Who knew that we'd be sequestered for as long as we were, that we'd be under the threat of becoming infected ourselves for as long as we were. We handled the financial lows that came with COVID-19 and the losses. No finger-wagging to be had but listening to people tell me for sure that we could have been more supportive. And this what I have a strongly held belief in; when we sent people home, we should have had some way to bring them together, even if it was just electronically.

Mike Sacopulos: Have you seen effective team building done remotely?

Mike Spellman: Absolutely.

Mike Sacopulos: It seems to me it's a very difficult thing to do or at least a different animal. When we look at each other through camera lenses, as opposed to across the room.

Mike Spellman: There's no doubt. There’s tons of research to support the notion that it may be the next best thing to being there. For example, in any of the larger universal hospital chains, their CEOs have holdings around the world. They don't fly around every day to team build. They get on weekly chats with their staff around the world to team building. So yes, there are some methods and techniques that you can do. It can be very effective. Team building has a bad reputation. When I have folks call me and ask me to come in and do team building, listening to their opening questions is often an implication that they're expecting some kind of kumbaya moment.

Mike Sacopulos: Are there certain relationships that are disproportionately more problematic for healthcare providers?

Mike Spellman: Yes. One of the chapters in my book is titled “Relationships with Insurers.” It's a love/hate relationship. Most healthcare providers would rather have a one-to-one relationship with their patients and no other interfering factors. Most patients are insured unless you're in the fortunate position of a fee-for-service practice. You're going to have to just deal with that triangulated relationship. As soon as a relationship is triangular, you have a problem. I'll tell you that with great confidence as a psychologist. So yeah, I would put relationships with insurers as among the most challenging of all. For example, if I have a relationship with an insurance company and a contractual obligation to a managed care entity to stay within certain parameters, but I have another contract and obligation to my patient, then I've got a major relationship problem. I have to decide where my allegiances are. I have to make decisions that I'm sure are compliant with my obligations, both clinically and ethically. I find those relationships the most challenging.

Mike Sacopulos: You mentioned that the physician or healthcare system's relationship with the third-party payers or insurers is love/hate. It occurs to me that it's much more hate than love. I don't know if your experience has been the same.

Mike Spellman: I think that's part of what I address in the book. You're competing for portions of the healthcare dollar. If you really break it down to its bare bones, there are a hundred bucks on the table and how much of that's going to go into the doctor's pocket, how much of that's going to stay in the patient's pocket, and how much is going to go to the insurer or the third-party payer. To that extent, it's a competition and it's not always a friendly competition. Because as much as we say, we're in the same industry, we're not. They're in the financial sector, we're in the healthcare sector. You have that dynamic to deal with, if you take that into account and don't turn that into a fight, you turn it into as much of a collaboration as you can.

Mike Sacopulos: I'd like to take a step back and just look at the title of your, your book because it's a comprehensive handbook for healthcare executives, which seems to me to show that it's intended for both executives and managers. Why both?

Mike Spellman: In part, because of the shape of the industry at this point. You know, for all my life, this limited discussion for small private practices or medium-size practices, independent practices, you know, the physicians don't have time to be out there doing the day-to-day ops. They don't have the time to be doing the day-to-day financial stuff. Somebody else is doing most of that for them. At the individual practice level, that's kind of always made sense to address both audiences in today's world. Many physicians are employed within larger systems. You're having doctors with usually heavier workloads than used to be the case as well as clinical workloads and administrative responsibilities. They're having to delegate more and more. They're having to know more and more because you can't oversee something if you don't understand it, to begin with.

Mike Sacopulos: What does the future hold for healthcare execs and managers?

Mike Spellman: I wish I could give you a one-line answer to that one. It's going to be a multifactorial multi-path kind of thing. There's going to be quite a few healthcare executives who are going to prosper in the coming years. The opportunities are changing. We are certainly seeing far more activity from the retail sector entering into healthcare. The insurance industry entering into direct care and telehealth is certainly a game-changer. To some extent, there are a bunch of large-cap enterprises entering the healthcare industry. And that should create opportunities for talented managers who are willing to make the shift. We're able to see the future and adjust course accordingly. On the other side of that same coin, there are those of us who are going to want to stay in the model.

Being ethically forbidden from advertising, there's going to be challenges for managers and those who are willing to take the time and effort to learn how to overcome those obstacles. To learn MBA-level management skills and take the time away from clinical work to implement what they've learned is one way. Or to hire consultants to do it so they can continue to prosper.

Mike Sacopulos: You mentioned some areas of potential success or opportunities and certainly some that may be failures. What are some of the more common areas learned from the success and failures of others to avoid costly mistakes and make more profitable decisions?

Mike Spellman: Do your homework, first and foremost.

Mike Sacopulos: My mother was right about homework!

Mike Spellman: That's right. I'm amazed how the folks I get to work with are exceptionally intelligent, exceptionally well-motivated, exceptionally exceptional folks who get an idea and look at the surface of it and pull triggers. Rule number one, do your homework. You need to make an informed decision and make a predictive decision. It's hard to come by, but that is why they have consultants. That's why they have attorneys, lawyers, folks like me, who consult on the business. Don't be shy about using them. If you're looking to build wealth and looking to make your practice more lucrative then you have to invest some effort and time. That one's loud and clear.

The world changes. And the healthcare industry changes at a very rapid pace. We get lost on things like MIPS and whatever the acronym of the day is. We get so bogged down in trying to keep up with those things that we're not looking at other factors. There are going to be new competitors in the field that weren’t there a few years ago. If you're not looking at that, you're going to get water sloshed on your boat by the wake of the bigger guys.

Mike Sacopulos: Makes a lot of sense. The book is Lucrative Practices: The Comprehensive Handbook for Healthcare Executives. My guest has been Dr. Michael Spellman. Dr. Spellman, thank you so much for taking the time to be on SoundPractice.


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