Urgent Care Medical Director: Too Good for Her Own Good?

Today I received an email from a physician, who took over an urgent care center for a hospital several years ago. The urgent care center had been losing money for years, then she took over and rapidly catapulted it to profitability. Profitability was great because she had a contract that allowed her to take home any profits. Of course, the hospital administrators never really thought profits would happen; and at the outset of the agreement they would have been thrilled with the prospect of a breakeven urgent care center. But now there is a problem: the medical director of the urgent care center has become one of the highest paid employees in the hospital system. The hospital administrators no longer consider a breakeven urgent care center to be an impossible dream; they have it. Now they have to do something to eliminate this compensation aberration. They will move to drop the physician's salary to bring it within the norms for an urgent care physician. What should she do? Below is my [edited] answer to her.

Dear Successful Urgent Care Medical Director:

What a problem! You were so successful in producing financial benefits to the hospital that the hospital must fix the problem of overcompensating you.

Dealing with the Hospital Administrator Mentality
This is actually a common problem. When centers are financial losers, hospitals are happy to sign papers to compensate physicians “as if” they were owners. In reality, however, they are not owners. Once an urgent care center develops great profitability, being treated like an owner will not fit with the hospital administration mentality. Hospital administrators cannot tolerate wages that are out of line with "prevailing wages"--even if they are resulting in significant profitability for the hospital. Hospitals generally see themselves as compensating physicians for job descriptions, rather than compensating a physician for the value added to the organization. Believe it or not, true business leadership often seems to be a liability in the hospital urgent care setting. The leader physicians either end up feeling undercompensated, or the hospital feels they are overcompensated.

You may negotiate with the hospital, but I suspect the end result will be that they will end up dropping your overall salary dramatically. The administrators will pat themselves on the back with their success--physician wages will be "within the norm." If you decide to leave, by the time an accountant points out the red ink, the person responsible pushing you out will have been promoted to VP for her outstanding success in reducing wage costs (only slightly serious about that).

It is very rare for urgent care physicians to earn higher salaries than emergency physicians. Most urgent care physicians would be thrilled to have their salaries set at the prevailing salary for emergency physicians. Some sort of productivity bonus is common, but bonuses rarely will bring the physician salary to the levels you have enjoyed. Bonuses that result in salaries that are "out of line" seem to always come to an abrupt halt when the contract ends.

Urgent Care Medical Director Salary Negotiation
All that being said, you are starting with the average urgent care physician salary as a base for negotiation. Maybe the following points would provide a basis for negotiation:

• Start with the base comparative salary they have offered (increase by ~10%)
• Ask for a contingent revenue growth bonus
• Ask for a personal productivity bonus, based on RVU production. If they balk, suggest that this can be given only for RVUs that are above the current average RVU at your center. Note: RVU-based bonuses are much
• Ask for a medical director stipend (I have seen anywhere from $5,000 to $50,000). You may be able to use the average bonus for ED medical directors in your region
• Assuming you have not signed an enforceable non-compete agreement, you may consider mentioning that you may "need to go out" and start your "own urgent care center."

Joint Venture Urgent Care Centers
Another option would be to open further centers under a joint agreement. There are UCAOA members that operate under joint agreements, where they share risk and share profits. If you want we can put you in contact with them.

Start Your Own New Startup Urgent Care Center
If this still does not result in a contract that works for you, maybe the best long-term answer is to open your own urgent care center(s). Employees get guaranteed wages; but owners take the risk of losses and bet on profits. It is unlikely that any hospital will ever see you as an owner. If you lack capital there are experienced operators out there that will team with you for a percentage of risk and a percentage of profits.

Good luck! Feel free to call me with questions.

David

Standardization: Freeing Average People to Deliver Outstanding Urgent Care Service

What seperates an excellent urgent care business from any other urgent care center.

Why it is not ________ that Produces Consistent Excellence:

• If it is outstanding leadership, then the urgent care center will drift from excellence whenever the leadership is not on site.
• If it is outstanding methods, how can you make sure that those methods are consistently followed?
• If it is outstanding staff, can you really find enough MIT graduates to staff your urgent care center?
• If it is something else, what is it?
  

Standardization to Excellence:
THE E-MYTH REVISITED by Michael Gerber suggests that standardization is key for any business or urgent care center that wishes to become free of the tyrany of massive everyday involvement by owners. Standardizing excellence appears to be the clear distinctive of what seperates McDonalds from a simple, inefficient, random-quality burger joint. Without standardization the urgent care center owns the owner. With standardization urgent care owners may become free to enjoy the fruits (rather than the burdens) of ownership. It is also clear that the leaders of any business must become passionately devoted to standardization, if standardization is to succeed.

The Replicatible Model Produces Replicatible Results
It seems that complete standardization is the hallmark of any replicatible model. Training & retraining of staff in a replicatible model (e.g., McDonalds, Starbucks, and many other multi-site businesses) does focus on memorizing sentences verbatim and exact procedures by average people. Standardization frees average staff to achieve world-class results. Otherwise, an urgent care operator must hire superstars, and that is cost-prohibitive.

Years ago, I lived and worked in Maryland, but I also commuted to once per month to an urgent care Illinois. I was amazed at how the drug reps were repeating (verbatim) the exact same high-impact sentences in both Maryland and Illinois. The drug companies knew that standardization could allow average salespeople to achieve world-class results.

Start Somewhere to Standardize Your Urgent Care Center
Maybe you want to consider starting standardization in you urgent care with a simple phrase used by all receptionists when patients enter the clinic. Maybe you can start with a simple sentence about strep testing when a patient presents with a sore throat. Maybe you will start with the way that the tray is set up for a laceration repair. This simple change can be the start of a new philosophy at your urgent care center. This change--along with scores of other standardized sentences and procedures--can be memorized and repeated thousands of times at your urgent care center. Standardization means:

• You are not relying on the whim of each staffer to deliver care according to their personal preferences.
• You can rapidly determine if a staffer is adequately trained in any area. You do not need to look only for gross deviation from standard of care. Rather, you can rapidly detect deviation from your specific standards--long before the deviation reaches the level.
• Any properly trained high-school graduate can deliver excellence without any himming and hawing on day 1.

Examples of Standardization in the Retail Industry:

• Starbucks: the staffer always places the coffee cup on the counter. I realized why when a new trainee handed the coffee to me, and was instantly admonished by the trainer to place it on the counter. Reason? I suspect that scalding a customer with coffee is much more likely and liability is higher if the coffee is transferred from staffer’s hand to customer’s hand.
• McDonalds: “Have a nice day.”
• Best Buy: “For your protection, you can purchase a prolonged warrantee with this appliance. . .” Note: last Christmas I entered the line at Best Buy at the back of the store and purchased the item in less than ten minutes. This “miracle” in customer service probably has a lot to do with standardization that seperates Best Buy from the rest in customer experience and Wall Street performance.
• Walmart: Sam Walton obsessed about getting credit card processing under one minute. He would be happy to see how his obsession about standardization and speed helped push the credit card revolution into Starbucks and McDonalds.
  
• Your Urgent Care Center: Send us your example of stardarization in your urgent care center with a comment below.
  

Why have a Practice Velocity Blog?

Blogging has become a popular way to communicate timely information of all sorts. We decided to have a company blog to allow us to communicate much of what we are learning from our daily interactions with urgent care physicians, administrators and patients. We have engaged in significant discussion as to how urgent care physicians and administrators can use this blog. Our goals for this blog include:

Giving back to the urgent care industry:
Throughout the existence of our company, we have been blessed to interact with hundreds of urgent care professionals in the USA. We have taken home hundreds of pieces of information that has helped us improve our products and services. We hope that our insights and observations will allow urgent care centers to benefit and improve their services.

Sharing new products and enhancements:
Practice Velocity has an entire research and development team constantly at work improving and upgrading our product line. A blog will give us an opportunity to inform the urgent care industry of our new products and services.

Relating best practices in urgent care centers:
Not only do I and my partners continue to practice urgent care medicine, we also meet with urgent care operators throughout the USA. Last week I was in Lexington, KY where Dr. Fadi Bacha has taken a group of urgent care centers that were in serious financial difficulty under the ownership of the University of Kentucky. In three short years, he has turned them around financially, while continually upgrading the standard of care. Many other urgent care physicians have success stories to share, and this blog will allow us to share these stories with you.

Discussing current issues in urgent care medicine:
Travel around the country has given me insight into the challenges facing urgent care centers. This week I visited with a group of urgent care centers in North Carolina. They are facing an all out assault by Minute Clinic on their metropolitan area. Ten new centers in local pharmacies are scheduled to open in the next few months. It seems that every time you turn on the television there is an advertisement for the stripped down services of these nurse practicioner-staffed pocket clinics. Will these clinics siphon off a large enough number of less-ill patients and force traditional urgent care centers to shut down? Will shutting down the traditional urgent care centers shunt patients with moderate acuity injuries and illnesses back to the hospital emergency department? If so, does the proliferation of the pharmacy pocket clinic mean that the current overcrowding crisis in America's hospital emergency departments will escalate out of control?

We hope that you feel free to enjoy and interact with the ideas that we share.