The Integration Mistake That Wrecks MSOs

  📍 The mistake that quietly wrecks physician group integrations isn’t financial or operational. It’s leaving an acquired practice as a tuck-in, running as is under its old name and identity. It feels respectful and avoids early conflict, but it creates a permanent second culture, one that never adopts a new brand, never flies the flag, never aligns with the company’s goals, and never rows in the same direction. I’m your host, Erik. Let’s go. integrations isn’t financial or operational. It’s leaving an acquired practice as a tuck-in, running as is under its old name and identity. It feels respectful and avoids early conflict, but it creates a permanent second culture, one that never adopts a new brand, never flies the flag, never aligns with the company’s goals, and never rows in the same direction. I’m your host, Erik. Let’s go.     📍 📍 All right. Welcome back to the DocBuddy Journal. Today, we’ve got a fantastic guest. We’re joined by Alex Fernandez. Alex is the CEO of Synergy Orthopedic Specialists. He’s based in beautiful San Diego, California. No, thank you. I really appreciate you inviting me into the show. Um, look forward to our conversation and hopefully learning a couple things It’s gonna be a good one, and we’re so glad that you’re here. I think as a, a baseline for our listeners, though, who aren’t already familiar with you, what would they need to know about you to understand the context of the conversation we’re about to have? 30-plus years, uh, as a physician practice, uh, executive, uh, running independent practices as well as private equity-backed practices. I’ve been involved in transactions where I’ve, uh, uh, both, uh, sold our business as well as acquired other practices as add-ons or tuck-ins. And, um, been doing this for, for a bit. Uh, currently in San Diego, I’m running a, the CEO of an independent physician practice, uh, 30-plus, uh, physicians, uh, 60-plus providers in San Diego. And, um, we’re also involved in a lot of different things like fellowship programs. Uh, we take care of the sports teams here locally. And, um, as part of the, you know, just the discussion, I’ve been involved in mergers of groups when they’re still independent as well as acquisitions of groups, uh, where we’re doing it, you know, uh, through synergy or when I’ve been in PE-backed organizations. And I think what we’re gonna talk a little bit about is, is particularly the mistakes that are made in trying to, you know, kind of put in sometimes a, a, you know, a round peg in, into a square hole. Uh, you know, so just it– the, the reality is, uh, trying to, you know, develop something that it, it’s gonna be really better for everybody, the physicians, the staff, the patients, everybody that’s involved in, in a transaction. Um- Well, it’s a really good place to start. I know for my audience out there, the folks that have had experiences with private equity and healthcare that have gone well, they’re going, “Awesome. Can’t wait to hear more about this.” There’s another side, though, where either they haven’t experienced a, um, a, a good integration or have only heard some things about it. Uh, they’ll be going, “Oh my gosh, what are we about to get into?” So let’s, let’s level set with our, our listeners, Alex. Uh, like you said, you’ve integrated physician groups across orthopedics, GI, and dermatology for like 30 years. Uh, what are the most common integration mistakes you see and, and maybe one that you’ve had to learn a lesson Yeah. I think, uh, for sure there, there’s two ways to integrate a, a practice, and one is everybody comes under an MSO, they stay independent to a degree. They bring in some of the systems in- in- into like the, the house or the MSO, uh, whether payroll, billing, et cetera, uh, HR functions. But then the, the autonomy is significant. You know, I wanna keep my different EMR, I wanna be, I wanna do billing this way. I want my staff to do the billing. No, I wanna outsource the billing. Um, my name of the brand is XYZ. Um, and they don’t necessarily integrate into one group, uh, integrate into truly one organization, one organization with one mission, one vision, et cetera. Uh, I tend to, uh, believe that the, the leader, uh, having one organization with a group of physicians that’s actually, uh, basically on the same boat, rowing in the same direction, using the same flag, um, it– for me, I think that’s the better model. Um, I think it, it, it requires a significant f- a significant amount of foundation and building up, uh, the platform, but it’s a lot easier to bring in organizations into that platform and, um, have them develop something that now it’s been grown, massaged, and beat up by, you know, 30, 50, 60, 100 doctors, you know. So if you have a group of three or five that are coming into a group of 50, uh, yes, there’s a lot of autonomy that they lose. There’s a lot of things that are gonna change. But at the end, i- it’s up to the organization to make sure that they do it the right way. So I think the, one of the biggest mistakes is the miscommunication that happens early on when you’re, I call it kind of dating. Basically, the, the two groups meet, the private equity guys come in or not, and everybody’s having dinner and everybody’s… It’s really cool, and we’re talking about all the opportunities, the synergies and, and the economies of scales, how things are gonna improve because we’re all coming together. But nobody really talks about the elephant in the room, which is, “Hey, things are gonna change.” Everybody talks about how positive things are gonna be, but the, the, the, the negative stuff around this is gonna be tough. It’s gonna ch- A lot of things are gonna change even when we don’t think things are gonna change, and that’s not just changing the electronic medical record system or changing payroll, uh, AP, you know, uh, everything that you’re gonna be managing in the business, HR, et cetera. But really changing to sometimes to, to a degree, the culture of the business. So I think not having that convers-conversation early on is, it’s easy. It allows for the physicians to feel, uh, like they’re being respected because, you know, what they’ve done before. But, uh, in truth, I think, y- you know, we’re just kinda not really d- dealing with, with, uh, with something that’s really important to make the transaction, uh, successful. Now, I wanna key in on something you said there around, uh, uh, a loss of autonomy, at least to a degree. Uh, you know, you see the, the surveys and the reports that come out that lack of physician autonomy is a key driver of burnout, and by extension, you know, the slow, unfortunate decline of this profession in America. Like, we are on the brink. We have a big problem coming our way, and I know you’re doing everything you can to stave that off, just like we are. Um, so when you say there, there’s a, a loss of autonomy, certainly there will be. You’re taking, uh, a business that you’re selling and folding it into a platform, like you said. But there’s also a right way. You also said there’s a right way that the platform can fold these new physicians in. What’s, what’s been a key, uh, there for Yeah, I think, I mean, being… I’m just gonna say it for, for what it is, being honest. Um, you have to be honest about your intentions early on. Uh, so if your organization does allow the physicians to have complete, uh, autonomy and independence, and they’re basically just tagging onto an MSO, and you’re just sell- selling, uh, a percentage of your earnings to, to the MSO or the organization for some, you know, billing services, payroll, et cetera, uh, for some administrative services, that’s fine. And if that’s what wants to be accomplished, it’s, is okay. I do feel that it does not drive that idea of a higher leverage platform that’s gonna grow three, four, five X over a period of time. Um, so That in itself, if that’s what you’re, you really truly gonna do, then that’s fine. But if your intention is to really build a platform, a single platform where everybody’s using the same, let’s say, um, PT, if you’re in orthopedics, you’re gonna use the, the PT that’s in the company, or you own an ASC, everybody has to use the ASC that’s in the group, or they have to use a particular brace for DME and, you know, a particular brand or a particular brand around implants, or if you’re in, in GI, it might be pathology or in dermatology pathology, you know, you wanna use the, the pathologist or the infusion, uh, centers or the ones that are owned by the, by the platform, i.e., the, the doctors that are being acquired have to use that. And everybody’s gonna be having the same brand, even if it’s for a short period of time. And I think there’s some respect to leaving a brand alone for a period of time. But at some point in time, that, that has to change to the new brand. Um, I tend to feel in general, uh, doctors over the years that I’ve worked with, um, they wanna have it their way. It’s like Burger King. I, I work with 30 doctors, and they literally all want a different flavor of whatever it is. They’re okay with some things being the same, but it’s usually not the same things that everybody’s thinking about. So some people are okay with like, “Hey, I don’t mind if payroll gets done, you know, with the software, but I wanna make sure that I don’t pay for so-and-so’s PA, or I don’t pay for this guy’s rent, or I… Or if I pay rent,” you know, and I’ve had these discussions as like very, very complicated ways to allocate rent because they feel that, “Well, if I’m not using the space, then I shouldn’t be charged for it,” and so on. So everybody wants a d- a version of, of Burger King, for all intents and purposes. They, they want what they want. And, and I think it’s because physicians, and particularly f- independent physicians, come into practice i, in a very entrepreneurial, uh, mindset. They wanna, they wanna have their own business. They wanna grow their business. They wanna be able to earn from what they, they generate and, and treat. A lot of people say is, you know, eat from what you kill, but, you know, we’re not hunting. We’re trying to make sure people stay alive, uh, and healthy. So it’s, it’s, you know, generate from your own productivity. And, and I think that That’s probably the biggest, uh, you know, struggle within organizations is trying to figure out a way to try to do maybe 80% of the time the things that are similarly and can be done the same way in a structure that, that allows the physician to still stay independent. I think where private equity management, me, you know, CEOs, executives should not be involved is in the way that physicians are practicing medicine, clinical care, true clinical care. But I think that whether it’s I need two medical assistants, or I need a tech, or I need a tran- transcriptionist, or I wanna use AI for ambience listening, or I don’t want the AI to answer my phone, or I want the AI to answer my phone, whatever it is, I think that the organization truly early on has to figure out, are we gonna be doing things as an or- one organization, or are we gonna leave a lot of flexibility to the doctors to do kind of their own thing? And, and I, I, I tend to feel that the first is the right thing is to have some type of a program that 80%, at least 80 or 90% of the, of the administrative tasks are being managed and handled the same across the business, so it’s easier to implement, um, duplicate, there’s a playbook, et cetera. Um, but when you start doing it where everybody can do their own thing, that’s where things get very complicated, very expensive for the overall organization, maybe not for the particular individual. Uh, but you’re not really taking the economies of scale to, to the next level, which the reason you, you did this, hopefully not, not because you got paid, you know, a couple million bucks, uh, to, to get a deal done That, that’s really well said. I don’t have anything to add other than to, to chime in that not only are you not taking advantage of economies of scale, you’re actually doing the opposite. You’re introducing inefficiencies into the larger machine. So just to quickly reframe what you said, leaving that acquired group as is, you know, would feel like the respectful choice, but it– as you laid out, you have a group of professionals, highly s- highly skilled, highly trained, very smart professionals that want their cake and to eat it too, but that’s just not gonna be the right choice, like you said. Yeah. Yeah So on the other end of that, um, what would be some of your pro tips for what real integration looks like? So beyond combining the back office, you mentioned earlier this starts with honesty. So early on in this, what is a potential transaction, being really honest, like this is how it’s gonna be with us. But where do you go from there, Yeah, I think in order to have true integration, there has to be a, a company culture that the organization, the overall organization has, that it’s positive, that it’s about growth, that it’s about improvement, but particularly about improving, um, you know, and providing quality medical care and also an exceptional healthcare experience. Those two things have to go in play. You have to have great physicians, great providers that are gonna b- do amazing things to take care of the patients and provide, you know, the optimal care depending on whatever specialty you’re in. But at the same time, the experience has to be there too. Bedside manner, the way the phone gets answered, the way that the staff smiles at you when you walk in, and the way they’re dressed, and it, it, the, even the decor of the office from a marketing perspective. Everything has to be tight, and if you, if in your practice that we’re, that we’re trying to add on, um, that’s not something that you can live by. Um, you’re more worried about, “Well, you know, I, I don’t make enough money, so I actually don’t… I, my, my office hasn’t been remodeled in 30 years, and it looks like it was from the, you know, the ’90s,” and th- things just don’t work well, and people don’t wear uniforms, or they dress whatever they want, and, and, and then people don’t look tight and professional and, and respectful to, to the patient experience. Um, they don’t answer the phone, they don’t return phone calls, et cetera. All those things, that’s where things n- no matter what we do or how much money we throw at it, things aren’t, are, are gonna work. So I, I believe that in order the integration to actually be successful, the company cultures, the physicians’, um, ideas of what business should look like, even if that practice is struggling, should be very similar, if not the same Well said. Culture is the only enduring competitive advantage. And in, and in this arena, uh, of involving orthopedic practices and by extension orthopedic, uh, physician-owned surgery centers, that leadership and that culture really has to drive from the top. And I’m, I’m echoing much smarter folks with much more practical experience than me, you know, great ASC administrators that you would, you would know by name, Alex. But do you have any thoughts on, uh, reformulating a physician culture, uh, that maybe isn’t exactly what the platform wants it to Yeah. It, it, that in itself takes time. Um, I think again, sometimes it’s, it’s hard to, to achieve. For example, I’ve been involved where, uh, we’ve had physicians that own ASCs independently, and they own different stakes in the ASC because that’s been the, the model that has been used over, I don’t know, now 30 something years. Um, whether they have a, a partner on top, a 51%, uh, shareholder or not. And then you have younger guys trying to buy into that ASC, trying to bring cases, trying to be successful in it and The, the financials don’t work out, then they end up going and building other ASCs with other friends or, or, or colleagues, um, et cetera. And then all the different things that don’t really mesh because the ASC, similarly to the practice, has its own culture, and sometimes it might be a better culture than the practice. Sometimes it’s a, a negative culture or a culture that, that’s only there to generate revenue and, and, uh, you know, and, and just get cases done, uh, or as a, as an alternative to, to the practice. Um, in Synergy, the– when we did the deal that we, we have, we u-we utilized, um… There was a couple years back, um, a, a document that CMS put out, particularly around ASC ownership and ASC ownership that was owned by a practice. And we used the opportunity to actually own the ASC under the practice, so that way both the practice and the ASC are extremely aligned. That also allows for new partners, young, young physicians that are still in a significant amount of debt but have become relatively, or over a period of two, three years, have become partners in the practice to also own in the ASC, uh, without having to come up with additional or a significant amount of, uh, cash outlays. Um, it, it, it deals with the, the way that you exit the practice. There’s not these big payouts to the people retiring where, uh, the younger guys have to buy out the, the guys that are, that are retiring. Um, it just allows the business to be vertically integrated. And then on top of that, we added anesthesia, which is something that I did in GI, um, many years ago. Th- basically building out, um, the anesthesia infrastructure, um, and services as part of the ASC under the practice, so it becomes an ancillary to the business, similar to what we do in, in GI with pathology or what we do with, um, in orthopedics, um, with, with the ASC or with physical therapy or DME, et cetera. So I think that, you know, when you think about cultures and particularly the, the ASC culture, you build the ASC culture that you want, but in order to create a better one, sometimes, in my opinion, I think you have to rethink about the model. Um, we’re partners with USPI in our center, and we did that because we felt that, you know, even though I’ve, I’ve had a lot of experience in, in co-owning and, and, and running ASCs, um, I wanted to focus the energies on our practice and growing, continue growing our practice in Southern California. But, uh, bring in a partner that can help us manage and leverage some of the, the efficiencies and the economies of scale that they bring in from contracting, purchasing, operational efficiencies, et cetera. And, and so far, so good. We’ve been– The center’s pretty new, so it’s about a year and a half in and, and we-we’re very happy with the, the relationship so far. That’s, that’s fantastic. There’s a lot of, a lot of alpha in there. I’ll encourage my listeners to, to wind that back and listen to it another time or two. Back on the, on the topic of culture and, and sort of brand equity, marketing, uh, all things of that nature, when you’re, when you’re, uh, folding in a new practice or a new entity into your platform, there really can be some branding tension, and maybe that’s a point of pride that it’s my name on the door, and I’ve been doing it for so long, and you can’t do this to me. Maybe there’s real marketing and real brand equity where you– if you were to look at some of the SEO tools, you’d go, “Oh my gosh, yeah, we’re gonna need to hang on to that domain. We don’t wanna trash that. Like, we need to for- we’re gonna forward it to, you know, the, the main company, but we’re gonna hang on to some of these assets.” Um, how– So I’m probably stealing a little bit of your thunder there, but when you do need to make a change, uh, to, to branding, to marketing, to all of those things, how are you gonna do that without losing patients and without upsetting any Yeah. So I think it, it depends on the size of the practice. That’s probably where it starts. A typical practice of three or four physicians typically is named something Specialists Associates or something Specialist Surgical Specialists or something of that sort. I mean, I was the kid that, you know, there were, uh, many, many, uh, gastroenterology associates of whatever, or in orthopedics would be, uh, orthopedic medical group of whatever, and, you know, the county, city, or, or market. So I think, you know, for sure there is a significant amount of pride and, and, and opportunity because you are the orthopedic group in that particular market, and you feel very strong about that brand. And, and if there is true assets, like you mentioned with a website, we don’t let that go. Um, we actually leave the site, uh, alive the way that it is. We might code in or change some of the copy to talk about the, the integration or merger or moving or, or whatever it is, uh, into the, the, the platform. And but we leave that, and we leave it for probably a long time, if not forever, um, because it, it feels– we might… What we might not do is continually spend any money in, uh, improving that, that brand and that, and, and the actual website. But for sure looking to, like you mentioned, drive some of that, that business and making sure we’re capturing appointments, calls, interactions with, with the potential patients or a-active patients into the practice. Um, so- Larger practices I think are harder because even if they’re called whatever, whatever of medical group, um, the group itself might have already really built a brand around that particular market, in some ta- some cases region. I mean, there’s some groups that have, uh, regional recognition, some groups that have had national recognitions. I, I was having a conversation with somebody in, in the GI and they didn’t mention the platform name of the group. They, they mentioned to me the group that they’ve had, that I knew of that’s been around for 40 years. Um, so it, it’s like sometimes it’s really hard. People just continue naming the brand. And a lot of times the brand is the physician leader i- in a lot of groups. I’ve been in, in organizations where people say, “Oh, it’s Dr. So-and-so’s group.” They don’t really mention the brand. So I think strategically it’s, it’s figuring out where they fit. But I’ll go back to our, our earlier point is, are you– is the thesis of the acquisition or the merger to leave them alone and to be part of a larger MSO that’s only interested in, in some economies of scale, but making sure that the group continues to run the way it used to? Or is the thesis to fully integrate them? So if you’re gonna fully integrate them, you have to do that with, with pa- with passion. You have to make sure that the people understand why this is happening. But again, you have to tell them early on. You can’t go ahead and spring it out to them, uh, a year. “Oh, well, you know, we left you alone for about a year and the brand’s already there, but you guys are now part of us and you’re running on our EH- EHR and everything’s going great. Uh, we’re gonna discontinue your brand.” That’s gonna be catastrophic because the reality is the, whether they sold to private equity or they joined a management company, if it’s some larger organization or an organization where the founders feel like, “Hey, w- we– you bought this from us because… And you bought it because we had an amazing, we have an amazing business because you felt that we were doing all the right things. Why are you messing this up now? Why are things gonna change midstream? You bought…” It’s not like, why? It’s a mistake. No. It’s like the way, as from a physician perspective, and I’ve had these conversations, they… The way they see it is like, “I built a great business. That’s what you acquired. Why are you gonna change it now?” So, but that’s because the conversation was always, “Oh, you’re gonna… Everything’s gonna be the same. You’re gonna be kept along. Uh, uh, everything’s gonna be the way that it’s, uh, it is.” And of course, even the physicians want some things to change. But like I mentioned before, it might be, and it might not be the same thing that all the physicians in the group wanna change, or it might not even be the same things that other groups you acquired wanna change. Yeah, that’s, that’s well said. I know the, the one change that, that, you know, in this particular type of transaction that every physician is looking for is a change to the, to their bank balance. Um, obviously not to be, not to be too crass about it, but you– Look, doc, you are selling this business. And to your earlier point, I think the being upfront can sort of ease that, that, “Hey, we might keep it afloat. We might keep the old branding afloat for twelve, eighteen months,” but there will be a time this is folding into the platform because we need the platform to be strong. We don’t need your acquired business to Yeah, I mean, and they made a commitment to being part of that, the bigger franchise, the, the brand. Whether, um, you’re in banking, real estate, or anything else, when you say, “Hey, I’m gonna be acquired by somebody else,” you know, the bank will go ahead and change the, the na- One day, all of a sudden, everybody’s, “Oh, new bank name, new… Everything’s different. The signs change.” It is what it is. I mean, that’s, that’s the evolution of the business Yeah, that’s, that’s how it works. Nuts and bolts. That’s, uh, that’s where you go. And then, um, sort of a-along these lines, we already kinda touched on this. We talked a little bit about, uh, lack of autonomy or loss of autonomy and physician burnout and sort of like the negative impact on the profession that is having. But coming more specifically to this point, what we’re talking about here now, Alex, less, uh, you know, less grandiose than fixing physician burnout nationally. Uh, but when you’re talking to physicians, um, about these potential deals, uh, the one thing I know you don’t wanna do is trigger a feeling of loss of control. You know, eyes get wide, and they start thinking like, “Oh, wait a second. Wait a minute. I’m not sure I really am gonna sign up for a loss of all of this control.” It doesn’t have to be this way. Uh, t-tell us what’s a, a, Yeah. So, so I think that for sure you start out with the critical things that make a medical group, a medical group by following the start, you know, guidance. Uh, just, you know, make sure you’re billing under one tax ID, everybody’s on the same payroll, everybody’s on the same HR platform. Accounting is, uh, completely centralized. Employees are all, you know, employed by the same organization, so are the physicians. Everybody’s on the same contracts. Everybody’s using the same payer groupings, uh, or payer contracts, payer agreements. So I think th- those are basic things that doctors kind of feel that they’re on the backside. Um- On the, on the front side, the burnout, personally, I think it comes from the pressures that every physician’s being put on that are– is in a private practice. Um, or, or in general, even maybe if they work for a- an academic or, or, or hospital system. They– we’re all being reimbursed the same or less than we were paid a year ago. That’s not, that’s not normal business mechanics. And at the same time, our cost of doing business continues to go up, sometimes governed by the, by whoever we’re working with, you know, the government or whoever it’s deciding different things, compliance, g- governance things. You know, years ago, it was like you have to implement electronic medical records or you’re not gonna get paid by Medicare. Uh, you, you know, in, in some cases in California, uh, literally yesterday, minimum wage went up for medical groups. Uh, I believe we’re now at $23 an hour, where minimum wage in San Diego is somewhere in the ballpark around 14, $15 an hour. So the pressures are happening regardless, and I think that’s where the burnout is coming through more than anything because they themselves, like I said, started in an entrepreneurial… Um, if they wanted to work for a health system, they would have. They decided to be part of an independent medical group, uh, an entrepreneurial lifestyle, be able to have my own schedule, be able to do what I need to do to, uh, take care of myself and, and my, and my family. Um, different than if you’re working for a health system. Yes, there are some pressures, and the pressures really come from, are you working enough, um, you know, uh, whatever your productivity measures are to continue getting that, the pay or the bonus that, that you negotiate as an employee of the, of the health system. So I think that’s the biggest burnout. So now we have to take it from a different perspective. As an administrator, we’re looking at, well, the doctor has all… They can do whatever they want from a clinical perspective, but things like, for example, documentation of the record. Some doctors like to scribe and have a transcriptionist the old way, you know, kind of like type in their, their notes as they have done for many, many years. Some doctors… I went to a practice a couple months back that literally still have paper records. They’re using m- EMR, but they’re still scanning paper records into their EMR. Some doctors in the group have Are using the, the actual suite of electronic medical records. So, uh, y- you name it, there’s, uh, all kinds of flavors on how you could document, and now we know that there’s also Ambience AI, where you can literally have a, a, a conversation with the patient, and it will go ahead and record everything and then put it into your record. And, and some you have to copy and paste, and some you have integrations with your electronic medical records that fills the information as you go along. So I think that from an administrator point of view, I’m always looking for ways to improve the experience both of the patient and the physicians by developing a biosphere that takes care of all these little problems that they have Also still keeping some wiggle room so that the physician feels like I’m not telling them they have to use Ambience AI to do their documentation or use an EHR they have to type into. Hopefully, they’re not using paper records at all, but if they still wanna have a transcriptionist in the room or they wanna use a transcription service where they’re using their, their basically their data recorder, hopefully not cassettes, but they’re using a, a, a recorder that’s getting all this, all this documentation into, into the record. Um, so I think you still have to provide some type of wiggle room to the way things are gonna happen on the clinical side. Um, if they want one medical assistant or they want maybe somebody a little bit more advanced like a, you know, an orthopedic tech because they- they’re doing bracing and they’re doing other things that, that, you know, a medical assistant does not have the expertise or level to do. Um, if you want somebody literally typing stuff for you while you’re sitting there with the patient, all of those, I think are great. The metrics that you use to be able to charge back the individual independent physicians, I think it’s, it’s the– it’s what makes it unique. So if somebody wants to have three medical assistants, no problem, but you’re paying for those because somebody’s gonna pay for it. But if the other guy says, “Hey, I wanna… I’m okay with just having one,” uh, or for that matter, “I don’t need anybody.” So I think you have to also develop the financial, um, metrics or algorithms to be able to do cost accounting by physician, by medical group, by organization, whether it’s the location. Uh, like I mentioned, rent is, you know, a very sticking point. You know what, in, in accounting principle is a fixed and variable expense to physicians that doesn’t necessarily relate. So you have to understand all of this. I will tell you, I, I love working with physicians. Um, I like the autonomy. I like the, the fact that, you know, that we don’t have this very governed and structural, uh, business. We sit down once a r- once a month with a couple docs and kind of think about where the business is and where it’s going, and we– and anybody’s always invited to attend any of these meetings. I do believe that the, the physicians that are in leadership positions typically don’t get paid, uh, or if they get paid, they get paid very little, and they put in a lot of time and effort that all the other partners in the group actually benefit from Well, and this is, uh, this is to your point about, uh, ensuring cost structures are, uh, are well understood and, and in alignment. I would imagine you’ve got some pretty wild war stories around pro formas going into the tail end of transactions and looking at these things going like, “Whoa. Yeah, that’d be… I hope we do. I hope we can figure out a way to have 100% margin on every activity we perform.” to even improve the physician’s, uh, productivity by being able to make the, you know, the process the, the, of the patient coming in and out of the, the room, out of the, in and out of the practice faster, uh, more efficient. Um, being able to make sure people get there on time. Um, whether we’re using AI to automate the appointment reminders or the no-shows and reaching out to them and say, “Hey, you know, I have this slot available for you to go ahead and come back into the office.” Or, and, and I keep on saying AI because that, that really is the, the most newest thing that’s happening. I mean, we– Some practices have been doing this for years, but there’s many, many practices. I mean, the adoption rate right now, I believe is somewhere around 5%, um, compared to, you know, what’s, what’s out there in the marketplace. And, um, and I think, you know, the… For sure there’s a lot of opportunities around that Well, let, let’s take a minute and, and scratch at that. I’m gonna change my question to you just a little bit that we talked about before we hit record. So you, you, uh, you mentioned that you have some AI solutions in, in your practice, which is great. Um, and, and for my personal opinion, you’re looking at it the right way. You have the right categories of, of products, uh, of softwares and solutions in there. On the whole, is AI, uh, and the ind- the healthcare industry’s violent embrace of AI over the last three years, is this a good thing, or is this something we need to keep an eye on? I think you have to keep an eye on it, and I think it’s a good thing given what I stated before. There are significant pressures in our, in our business to reduce cost, uh, given the fact that revenues are static, if not decreasing So when you look at in, in orthopedics in particular, knee and hip replacements, uh, got a big cut this year. Uh, in many other specialties, they’re, they’re getting cuts or if nothing else, they’re, they’re getting flat, you know, 1% or 2% increases when we know, uh, rents going up 4% or 5% every year. Uh, raises are going 4% or 5% every year. Other cost of goods and, and other expenses that we have in the business are going up. I mean, uh, even like cellular service, I, I got a, a, you know, a message from our cellular service provider, “Oh, we’re gonna raise, uh, the rate by another 8%.” I’m like, “What?” And, and, and, and benefits, don’t even get me talking about benefits. You know, get- paying the providers that pay us that don’t give us any increases, but we have to incre- they increase our rates for worse, uh, services or, you know, lowercase, you know, product or things that pay less or, or have more out-of-pocket or networks are, are more narrow with 15%, 20% and 30%, 40%. I mean, I’ve heard of groups that got 40% increases. I mean, and, and you’re trying to, again, provide health services to your employees and, and be a good employer, a good steward where the, the, you know, we’re not seeing those increases. We know that or everybody in the, in the industry knows that. Uh, but on the other hand, payers are continuously acquiring practices, acquiring, um, you know, pharmacies, uh, all kinds of healthcare delivery models into their systems, providing services, providing the AI, providing technology, managing claims, et cetera. I, I always think about, you know, who controls, uh, the money in healthcare and, you know, used to be where people think, “Well, the doctors are the ones that control it.” And then you would say the next thing would be, “Well, the health systems are the ones that control it, because they’re the ones that get the most money, and they get that site differential where they get paid more, uh, by providing a service in the hospital than in the office.” But in reality, it’s whoever controls healthcare from a particular perspective of employing the doctors, employing the ASCs, employing the technology that we use, managing the claims and how they get managed and paid for, and then finally, the ones that are actually charging the employers or the individual patients or Medicare, CMS or Medi-Cal, um, around the, the rates for, for health services. So i- it’s just very interesting how the economics in the business of healthcare over the last 30 years is changing. I mean, I started in this business in the front desk doing claims, you know, managing paper claims and, you know, typing in, in a basic computer software to send claims to, uh… send h- HCFA claims to, to Medicare electronically. And I remember this thing was like a dial-up modem, and beep, beep, beep, whatever. It was like, it’s ridiculous. And, and the technology, we, we, I mean, we’ve brought it up like five or six times. AI, I mean, we’re having artificial intelligence answering our phones, artificial intelligence Uh, and we use it in MRI to process the imaging of the MRI faster so we can add three or four more patients into the schedule, um, in a more efficient way. Uh, AI to help you document your notes. We have also AI that when you call the office and you wanna, uh, pay a bill but you have a question, the AI can tell you that the reason you owe $250 is because you have a deductible, and da, da, da, da. You know, “Would you like me to send you a copy of your statement? Would you like me to send you a link to pay with your credit card?” Uh, it, it, it’s, it’s incredible the amount of technology that we have transformed. I mean, uh, again, a practice runs now. The electronic medical record system or practice management system is what runs the practice. It’s how the practice communicates with patients, with themselves, with each other. Um, and, you know, b- I, I cannot even imagine a, a solo doctor trying to just continue to survive, um, you know, unless they have a very specific boutique practice and something that they’re doing that’s very unique, concierge-type things. But outside of that, um, it, it– I don’t know. I– for sure, my daughter’s try- is studying to be a psychologist. She’s, she’s on her, on her second year, uh, or th- third year of psychology, and I’m very proud of her, but at the same time I’m thinking, “Oh my God, what are you doing?” You know? It’s, uh, we need behavioral health, uh, people in the bu- in the world, but it’s probably the, the, the same way we need doctors and nurses and all kinds of healthcare professionals, but it just continues to get squeezed and squeezed more and more Well, I, I gotta climb on top of my soapbox here, at least briefly. Um, here’s my prediction. In the next 36 months, we’re gonna start to see, uh, talk about these headwinds and their impact on people wanting to be physicians and providers of any type, uh, on mainstream news. Today, we talked about our friend Scott Becker, uh, before we started to record. So the Becker’s family of, uh, of, of news sites, they’re talking about it. The other healthcare news sites are talking about this lack of, uh, physicians that is already happening, starting to feel the crunch. I know you’re a, a Miami guy, a former Miami guy. I waited eight months for an annual physical in Miami with the big pineapple. You know the group. Um, but we’re gonna get to this point where the main, uh, cable news is gonna start talking about this physician shortage, and they’re gonna go, “Oh my gosh, how could this have happened?” You know, all of the sudden, we’ve got this huge problem, and it– no, it’s not all of the sudden. It’s been building and building and building, and it’s just been abuse by all parties towards the pro– uh, towards the profession. Um, and then we’re gonna have a real problem to untangle. So I- I know we wanna cover a little bit more ground, Alex, but if you had a magic wand, how do you fix this looming shortage of physicians? for, for a long time the answer has been, well, let’s use extenders. Let’s use physician assistants to extend the practice. I mean, most of the time, I mean, at least for my-myself, uh, half of the time I’m seeing, uh, a PA or an P for my primary care needs. In some cases, even in other specialties when, when you’re looking at follow-up care or, or pr- or even primary care within a specialist, um, you’re seeing an extender. And that has gotten difficult because again, same thing, you know, they– these are very smart people and in reality they could do other things. Maybe they start as a PA, but they feel like, “Well, you know, that’s really… I, I love being a clinician, but I need to make more money, so I wanna get into an administrative function.” Um, CRNAs was the answer to anesthesia, uh, for years. But it similarly, it’s– th-there are just not enough programs, there are just not people graduating from these programs to, to do that. So there– I, I agree that there’s a shortage of physicians, but there’s also a shortage now of mid-level providers. There’s also a shortage of all kind of spectrums, nurses, techs, et cetera, uh, in the field. Um, we see that on a regular basis when we’re recruiting talent, uh, whether we’re, we’re looking for a physician. I mean, thankfully, we have a, a sports fellowship program that if we had an opening, we always could look for one of the three people that are in the program to, to, to bring on board. Um, but in reality, also in, in some areas, the market is somewhat saturated because you have to do more with what you have in order to make a decent living. Um, if 10, 20, for sure 30 years ago, a physician made a lot more than they make today. Um, and it’s harder and harder on them, and their cost of living is also increasing, whether they, they live in a nice house or a fancy house or not, but their taxes are going up, their insurance is going up, all their personal expenses are going up as well. They’re human beings like everybody else. They’re not robots. So the, uh, the whole mechanics of healthcare, in my opinion, um, at some point in time will have to change, whether it’s because it explodes or there’s a bubble or something happens. But, um, the answer in my opinion is make it easier for people that wanna be in this business to be in it, but also the, their true answer is cons-compensate them fairly like you would expect to compensate everybody else fairly. I think it could be that easy too. We’ll, we’ll see what they do. We need Washington DC to step up here. No matter what side of the aisle you’re on, we can– I think we can all agree CMS could do a little better. Uh, so Alex, in, in closing here, uh, what advice would you give a leader who is about to acquire or merge with another Yeah. Uh, I think I’ll give the advice primarily for the person that’s gonna be acquired or is thinking about selling or is thinking about, you know, joining a larger organization that’s, that it’s not theirs. I would say, like anything in life, spend a lot of time dating, getting to know the other party. If you’re really interested in doing this, is doing a lot of due diligence and understanding what they’re like, what other people think of them, uh, what their organization is like. Spend time, maybe not just one visit for a couple hours, but spend maybe a day or days and seeing how the organization runs, where– how does it fit into the way that you and your organization runs to make sure that there’s, you know, at least a 50/50, 60/40, maybe preferably 80/20, where at least 80% of the time it seems like, hey, the, the two groups are very aligned on, on the big picture items. And yeah, maybe there’s 20 thir- 20% that we can negotiate on, and it’s not really about the money or about the financial output after the, the merger. It’s more around can, can we really survive together? And are we gonna be… Is it gonna be two, you know, one plus one equals five? Um, not it’s gonna be one plus one, it’s actually negative two. Um, because, uh, I– again, there’s deals that I’ve been involved with that, uh, not having that discussion, not having a lot of clarity, um, has actually hurt all parties That’s been a recurring theme, being upfront and honest with expectations of what this thing’s gonna look like when we bundle it all together. So Alex, where, where can listeners connect with you online? Are you big on LinkedIn Yeah. All, all social medias. I’m on LinkedIn, YouTube, Instagram, uh, Facebook, all of them are– It’s easy. All of them are Alex Fernandez MBA. So any platform you want, Alex Fernandez MBA, I’m there We will be sure to get links to all of those destinations into the show notes. Alex, this has been a Likewise. Thank you for the invite. Thank you for the, the, you know, the conversation and sharing. Um, and I really love participating Our pleasure. You got a standing invite to come back. But until then, on behalf of the entire DocBuddy team, we wanna thank you for listening out there in podcast and in YouTube land. Be sure you’re subscribed on Apple Pod, Spotify, and YouTube so you always get the newest episodes of the show. You can also get them from docbuddy.com. And until next time, I’m your host, Erik. We’ll talk to you soon