We help physicians, scientists, entrepreneurs and managements change the world

ALDA & Associates International, Inc. Newsletter

 2022 SUMMER EDITION

Features & Articles in this issue

Breaking News

A reminder about our Newsletter. Since we specialize in Healthcare, the feature article will always deal with healthcare. Its content will benefit all constituents-providers, insurers and patients so even though you may not work in healthcare you will benefit in knowing what is emerging which may affect your patient experience. The second article may also feature healthcare but may also focus on an aspect of business that will be of interest to all of our readers. Additionally, earlier editions of the Newsletter are archived on the website. Readers can find them by scrolling down to the bottom of the newsletter.

In this issue we look at the need for physicians to be leaders and innovators and, as such, be trained as entrepreneurs. Many physicians believe they are already entrepreneurs by virtue of establishing their practice(s) but are they really trained as leaders and innovators. The second article  identifies 7 things that leaders need to avoid to be successful.

ALDA continues to add client engagements in the industry and is now working with several drug development companies to assist in refining their strategy, capital raising, getting their drug candidates through clinical trials and thus adding to their product pipeline and navigating the Food and Drug Administration. We also are providing due diligence assistance to a healthcare institution as it evaluates alternate investment opportunities. We also assisted a company refinance and restructure their indebtedness. Our new clients continue because we performed successful engagements for them in the past or are former colleagues looking for our significant expertise and experience. 

Book News

   Essentials of Corporate and Capital Formation
   by David H. Fater
   ISBN (13): 978-0-470-49656-5
   ISBN (10): 0-470-49656-8
   Cost: $39.95
   Paperback: 224 pages


 

 
Brief Description: A simple and effective guide to the mechanics of finance and corporate structure.

About ALDA:

ALDA & Associates International, Inc. is a business and financial consulting firm committed to assisting companies with:

We help physicians, scientists, entrepreneurs and managements change the world. Our experienced professionals are dedicated to helping clients unlock inherent value and create new value. The real-world experience of the ALDA team is leveraged for each client's unique circumstances, challenges, and people.

Among ALDA's hallmark services:

Our experienced professionals can show you all the right steps. For additional information on how we can help, please contact us by email at dfater@alda-associates.com or rcohen@alda-associates.com.

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To be Effective Leaders Physicians Need to be Trained as Entrepreneurs and Encouraged to Innovate!

We need more physician entrepreneurs. That is a scary realization to state when one understands that physicians are intelligent, they self-select and crave autonomy. They just don’t work well as employees but just having their independence (and possibly an MBA-very scary) does not make them entrepreneurs. 

In that moment that a physician becomes an entrepreneur (take a physician that converts their practice to a direct primary care model) they have put one foot into the world of small business ownership. While their individual practice may have been considered entrepreneurial, they have crept out of the world of salaries and benefits and guaranteed success. Unless they defied the odds, they had set a course that, for the majority of people, leads to failure at best and bankruptcy at worst.

It can take a year and a half to realize that the physician had become a small business owner and has developed the type of business that adds character to a community and is solving problems that were so pervasive that people were using their services despite poor to no efforts at marketing.

The new practice model can see week-over-week growth in patient numbers. People are so in need of health care without the hassle of insurance that they are -- quite literally -- Googling the practice, calling the practice and trusting that this was a legitimate physician's office.

(That trust thing is huge. On more than one occasion, callers only want to make sure it is a "real" physician because it isn’t  affiliated with one of the large, corporate hospitals in town).

Once a physician identifies as an entrepreneur, a whole world of resources, networks, books, literature and way of thinking opens. Suddenly there develops a nagging thought that takes hold. If health care needs to be better as an industry, more physician entrepreneurs are needed. This doesn't mean more physician administrators are needed; far from it. Physicians are needed who take the leap to launch an idea and solve a problem.

With no institutional knowledge or expectations to hold them back, entrepreneurs have the freedom to create elegant, simple solutions.

Entrepreneurs, because they're often either working solo or in small groups, have the ability to change and pivot quickly when the climate dictates it.

Health care has lost sight of the physician-patient relationship; an entrepreneurial endeavor, by necessity, demands that the inventor get down to a personal level and figure out solutions that work.

Entrepreneurs often make decisions that are motivated by the desire to solve problems rather than the desire to make money. Health care may benefit from more leaders who exhibit this quality and in so doing the money/profits will follow.

Lastly, and most importantly, physicians and entrepreneurs share a central tenet of their being: problem-solving.
Both physicians and entrepreneurs are inherently problem-solvers. And everyone reading this knows that there are major problems to solve in health care.

Health care amounts to almost 18 percent of our gross domestic product (and keeps rising!) yet, somewhat paradoxically, it is an industry that has a huge target on its back. Every person, politician and business owner wants to reduce spending on health care. We want the best care, but we don't want to go into bankruptcy to receive it. We, as a society, have decided to commoditize health care yet we are frustrated when patients are turned away. Drug costs are increasing with time rather than decreasing, counter to the trend with any other science and tech industry.

Physicians are the cog on which the entire health care system turns. A little known fact that I have expressed for years is that physicians and their pens are the strongest part of the healthcare system. They control 80% of the health care dollars yet only receive 20% of those dollars. That 80% is represented by the orders they write with those pens. Without those orders, those prescriptions, those medical decisions, the  procedures and the analysis of a patient's needs, nothing else in the health care system receives business. If the health care system was a widget-making factory, physicians would be the machines that make the widgets. Without them, there is no product and no business.

Several generations ago, physicians were both the widget-makers and the owners of the factory. They had both the burden and the privilege of seeing the product from inception through the machination process and into the consumer's hands. They helped set prices and had to interact directly with the consumer that paid that price.

As the influence of insurers grew with the creation of Medicaid and Medicare in the 1960s and the growing influence of HMOs in the 1990s, more and more physicians stepped into the role of simply creating widgets; running the factory was becoming too complex and required a certain administrative skill set -- or at least required that the widget-maker focus on making widgets while someone else focused on running the factory.

But what if all the physicians stepped away with their widgets that they worked so hard to create and started to make them differently? Or started to sell them in a different way? What if physicians started to think like entrepreneurs? What problems could be solved?

Maybe it's the debt load coupled with above-average paychecks that hold physicians hostage in the system. Or a terribly restrictive employment contract. Or worse yet, perhaps the biggest hurdle is  complacency as physicians; perhaps they actually are satisfied with and unaware of --or in denial of -- the deficiencies of the system in which they operate.

All of which are reasons we need more physician entrepreneurs. The world needs more widget-makers who see that there's a better widget -- or a better widget-making machine. Physicians took an oath to help, and it just may be that stepping out of the current health care system and thinking like the problem-solvers is the best next step.

I can identify physician entrepreneurs that have created venture backed companies that have attracted substantial amounts of capital that are in the process of changing the way medicine is practiced and produce substantial savings and improve quality of care. We just need more of them.

As health care continues to rapidly evolve, physician entrepreneurship is increasingly important to ensure the right changes are made for patient care. This is not different than any other form of clinical practice. Being a physician entrepreneur does not necessarily mean that you’re sacrificing current clinical practices for a business.

In order to be successful in medical and health care innovation, you have to have a very strong understanding of the clinical fundamentals that are being addressed. This is not trying to divert off the path of traditional clinical medicine, but rather to think of this as a way to enhance current clinical guidelines in terms of practice. Let’s make a better mousetrap.

Entering the entrepreneur space requires risk and soul searching
As expressed earlier in this article, we live in a world of startups and innovative ideas. So, when an idea comes to you and you go through the steps to design, develop and prototype your idea, the next logical step is to seek funding and partnership. But the physician/entrepreneur needs to know what he or she is getting into.

The way I like to look at this is to understand the opportunity-cost and the risk associated with the opportunity-cost of any decision that that is made. For example, if a physician finishes their education and residency and makes the decision to pursue an entrepreneurial venture, look he/she should look 10 years into the future when they would have their practice and their business and ask themselves how much time and energy would be allocated to their practice relative to the business.

Make sure you’re comfortable with taking the risks that are involved regarding your time and the fact that you may not be paid for every hour that you put into your business. If the benefits and your passion outweigh the risks—and you are willing to take those risks—then it may be the right path for you.

An entrepreneur is somebody who not only has an idea and is willing to start a business but who is also willing to take risks to get it off the launch pad.

Finding those “lightbulb” moments
 
There are obvious clinical unmet needs everywhere you look. It’s a matter of trying to understand what is inefficient or problematic in patient care and how you can make it better.
Two ways that a resident or medical student can get started:

There have been articles in the Journal of the American Medical Association questioning the impact of health systems change on doctors and how the medical educational establishment should respond with curriculum reform that includes, among other things, health economics and population health.

They further provide a short history of healthcare policy and structure and how it has evolved from an unregulated industry to one that has become increasingly corporatized. They note the rise in employed physicians and that physicians might become less professional, but their professional role could increase as their entrepreneurial role decreases.

It seems to me there is confusion about physician entrepreneurship, its definition and whether it represents a threat to professionalism Is a physician entrepreneur someone who starts and runs a business, or is it something more?
1. Entrepreneurship is the pursuit of opportunity with scarce, uncontrolled resources. The goal of all entrepreneurs, including physician entrepreneurs, is to create user defined value through the deployment of innovation.
2. Innovation has both a qualitative and quantitative component. It refers to doing something new or something old in a new way that creates user defined value that is a significant multiple of the competitive offering. Sick care sorely needs innovation that is not incremental or sustaining, but rather significantly adds at least 10x the present value to have an impact.
3. Physician entrepreneurship is not the same things as private practice nor is it fundamentally about practice management. The increasing rate of employed physicians should not be interpreted as decreasing entrepreneurial role of doctors and its consequent impact on medical professionalism. To the contrary, when done properly, it enhances medical professionalism.
4. There are many different goals and roles for physician entrepreneurs as small to medium sized business owners in private practice, technopreneurs, social entrepreneurs, intrapreneurs i.e. employed physicians acting like entrepreneurs, freelancers and consultants, and physician investors. Social entrepreneurship has a long history of physician involvement and business school courses in social entrepreneurship and impact investing.  Roles can vary as well. Some physician entrepreneurs are problem seekers, others problem solvers. There are also story tellers, money finders, score keepers, social connectors, risk managers and business developers.
5. Employed physicians, whether academic or non-academic, have the potential to be no less entrepreneurial than their colleagues who are in independent practices.
6. While medical educational reform is necessary, expecting medical students to master health economics and population health is an unrealistic expectation. Medical schools need to be part of entrepreneurial universities with the goal of instilling an entrepreneurial mindset in all graduates, including health professionals. To that end, medical schools and graduate schools should rethink how they teach and practice technology transfer and commercialization and how they give faculty innovators the tools, incentive and recognition for the scholarship of innovation they deserve.
7. Physician entrepreneurship enhances medical professionalism, it does not degrade it, as long its practitioners understand and resolve the conflicts between the ethics of medicine and the ethics of business. Violating the patient or public trust by self dealing or undisclosed conflicts of interest degrades any profession that has a fiduciary relationship with its customers or clients.
8. Physician entrepreneurs create value for patients in many ways other than seeing them face to face for an entire professional career. The upcoming generation of medical students and residents and scientists and engineers in graduate school understand that better than their school’s faculty and administrators and they have engaged in bottom up efforts to fill the gaps in their education and experiences.
9. Every threat to the existing practice of medicine, whether, as noted, it be acute care to chronic care, face to face care to digital care, or corporate care evolving into more patient centered care, represents an opportunity for physician entrepreneurs to help patients by adding value.
10. Every industrialized country is facing the issue of how to provide their citizens with health services with scarce resources. Innovation and entrepreneurship , fostered by rules that catalyze them, will be the solution.

Physician entrepreneurs whether as technopreneurs, medical practice entrepreneurs, intrapreneurs or international social entrepreneurs are making a difference. 

The “golden age” of medical practice is being replaced by the “golden age” of physician entrepreneurship since there has been, arguably, no better time to be a doctor who sees the business of medicine as creating value on par with the practice of medicine as another way to help patients.

Through all this, let’s all not forget successful physician entrepreneurs will also accomplish the Triple AIMS being espoused and supported throughout the medical world today that being- improving the individual experience of care; improving the health of populations; and reducing the per capita costs of care for populations.

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To explore ways in which we can provide assistance  with your  strategy or intent to join the entrepreneurial ranks in this evolving health care environment, please contact David H. Fater at dfater@alda-associates.com or Richard M. Cohen at rcohen@alda-associates.com

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7 Things for Leaders to Avoid (Especially Physician Leaders)

1. Become infatuated with yourself. Some leaders believe everything is about them, and whatever they say is right. When you become self-absorbed or have an exalted ego, you create your own sense of reality and it is impossible to get other team members to trust you. Trust is an essential. Without it, leaders are unable to generate buy-in from team members at any level of the organization.

2. Divide instead of unify. A true sense of community is necessary to move a health system forward. Everyone must be willing to put their shoulders to the wheel together, and that is impossible when animosity festers among team members. Some leaders think a highly effective, motivational tactic is to encourage competition among members of their C-suite, but you would be hard pressed to find a successful sports team that thrives on this dynamic. The greatest teams in any sport come out of the locker room ready to fight for each other, and they understand that resentment undermines any chance of success. The same holds true for healthcare organizations, and leaders who think otherwise are doomed.

3. Choose the wrong people. Being a leader requires putting yourself under a microscope, which can be difficult and uncomfortable for many people. The worst way you can react to those feelings is by surrounding yourself with sycophants whose best quality is their affirmation of your insecurities. Some leaders would rather create a circle of unqualified “yes-men” than team players who have the courage to speak their minds and disagree with their boss. Don’t demonize those who disagree with you. And remember that ideological alignment is not the basis for effective team building, so don't let a need to be liked cloud your better judgment.
4. Never saying you are sorry or wrong. In keeping with my previous point, while all leaders need to be confident, they also need to be open-minded and willing to consider opposing views. Excessive self-confidence can lead to the unfortunate and often-disastrous consequence of believing that you are always right – even when the evidence shows otherwise. Taking accountability by admitting failure and acknowledging it is a strength, not a weakness.
5. Blame your predecessors.  Rather than take responsibility for the state of their organizations, some leaders would rather blame their predecessors. While they think this clears their plate of any blame and gives them the air of infallibility, all it does is establish a culture absent of accountability, where blame passes from one employee to another. “Success,” as Winston Churchill so aptly stated, “going from failure to failure without losing your enthusiasm.” All leaders make mistakes and all decisions have downsides. To burnish your own reputation by ignoring the accomplishments of those who came before and excessively focusing on the negative avoids an essential element of leadership – taking responsibility.
6. Take communication style for granted. Some leaders think content trumps communication, but how you spread a message is as important as the message itself. Make time for face-to-face interactions with team members at every level, and don't be afraid to engage people through technology. However, never hide behind technology as a means of avoiding in-person interactions.Some leaders think they should only communicate with team members within their organizations when there is serious news that will have a significant impact on day-to-day operations. However, if your only point of view is how bad things are, you will undermine organizational pride and hurt the overall morale of your team. Leaders should accept responsibility for their mistakes and create a culture of accountability, but also celebrate everyday wins. Never forget that attitude comes from the top down, both in what you say and how you say it.
7. Lower the bar on civility. Leaders set the example for how employees should treat each other, and must be able to apologize to people they may have wronged, which demonstrates the value of humility. If leaders do not embody these positive values, the bar for civility will be lowered for all employees, and the results can be toxic and destructive.

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To explore ways in which we can provide assistance  with your  strategy and organization,  please contact David H. Fater at dfater@alda-associates.com or Richard M. Cohen at rcohen@alda-associates.com

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Representative Engagements

Our experienced professionals are dedicated to helping clients unlock inherent value and create new value.

The ALDA Team includes, among others:

David H. Fater - Chief Executive Officer

Strategy, capital markets, restructuring, and mergers and acquisitions experience with public healthcare companies focused on physician management, rural healthcare, nursing homes, HMO's, diagnostic imaging and medical devices. Deeply involved in the implementation of the Affordable Care Act with Accountable Care Organizations, Independent Practice Associations and Management Services Organizations. 

Richard M. Cohen - Senior Operations and Business Development Executive

Healthcare operations and worldwide sourcing experience. Skilled in healthcare (physician management, clinical trials, medical and patient process flow, diagnostic imaging and life science) operations as well as in issues dealing with importing, exporting and manufacturing operations in South America, Far East and Europe. 

Thomas J. Bohannon - Senior Financial Executive

Accomplished, creative CPA, outstanding analytical and technical abilities. Has experience for over 40 years in public accounting and private industry including nursing homes, medical device companies,  hospitals, not-for-profits, retail, manufacturing, import/export and natural resources.

R. Brent Miller, Ph.D. Senior Research Executive
Focused on advancing Chemistry, Manufacture, and Controls (CMC) activities of small molecules from discovery through development. with more than 30 years of drug development experience. working with start-ups, mid-size, and large pharma companies. Throughout this experience, he has led a wide variety of operational departments, including Technical Strategic Alliances & Due Diligence, Project Management Office, Pharmaceutical Sciences (Formulation Development/Analytical Development), Bioanalytical Development, Quality Control and Stability.  .

A. Ronald Turner - Senior Healthcare Executive

Senior healthcare industry executive with strong entrepreneurial focus including CEO and COO positions with start-up hospital companies and a publicly-traded hospital company. Extensive and successful operations experience for more than 50 hospitals and 9 nursing homes, and senior reimbursement experience for a major publicly-traded hospital company and a national accounting firm. Experienced in mergers and acquisitions, led operational turnarounds and debt restructurings that created significant value.

Mark W. Caton – Senior Healthcare Executive

Senior hospital executive with over 30 years experience in operating not-for-profit and investor-owned rural/community hospitals as CEO or COO, and Regional COO with several national hospital companies.  Skilled in strategic planning and business development, operations management, revenue cycle management, medical staff development, and quality/resource management.

Daniel N. Weiss, M.D., F.A.C.C. - Chief Medical Officer

Medical devices and healthcare practice experience, engaged in a private medical electrophysiology practice where he performs numerous invasive cardiac procedures and has served as a consultant for several Fortune 500 Medical Device Companies including Philips, Boston Scientific/Guidant, St. Jude and Medtronic, as well as for several medical device and drug start-up companies. 

David Bott - Senior Information Technology Executive

Systems and network support solutions experience, proviedes analyis of strategic business needs and assessment of business models and their integration with technology.  

Santiago Guzman - International Executive

Experienced in new project development for companies in a variety of industries from start-up to Fortune 500. Client relations management, fluent in English and Spanish. Skilled facilitator for introductions with influential leaders in South America including those in the health care industry. 

With offices in:

For additional information, please contact:
David H. Fater, Chief Executive Officer
ALDA & Associates International, Inc.
4772 N Citation Drive Suite 103
Delray Beach, FL 33445
(877) 845-4657
dfater@alda-associates.com

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