Kentucky Doc Summer 2017

summer 2017 • volume 9 • issue 2

Profile in Compassion

Dr. Cary Blaydes

A Heart Doctor with a Kind Heart "The satisfaction of helping people was the most important thing."

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Medical Scribes: a Cost Analysis

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CONTENTS Changes in Financing and Distribution PAGE 5 Eating can Heal. Eating can Kill.

PAGE 8 Medical Scribes in a Physician Practice PAGE 10 The Psychology and Neuroscience of Change PAGE 14 Community News PAGE 16 COVER STORY: A Heart Doctor with a Kind Heart PAGE 20 Working Through Office Conflict PAGE 22 Content Driven Marketing PAGE 26 Buyer Due Diligence PAGE 28

EDITORIAL

BOARD MEMBERS Robert P. Granacher Jr., MD, MBA editor of Kentucky Doc Magazine Tuyen Tran, MD Lowell Quenemoen, MD Tom Goodenow, MD John Patterson, MD Thomas Waid, MD Danesh Mazloomdoost, MD

STAFF Brian Lord Publisher

FROMTHEEDITOR • SUMMER 2017 Robert P. Granacher Jr., MD, MBA, Editor-in-Chief, Kentucky Doc Magazine Welcome to the summer edition of KentuckyDoc, the magazine written and edited by physicians for physicians. The central theme for this issue is change.

We are devoting this issue to a colleague of ours who has retired after working 46 years as a cardiologist in Lexington, from 1964 to 2010. That is no other than LMS member Cary Blaydes, MD. He exemplifies dealing with changes in one’s career and life, while providing exceptional patient care and a compassionate warm heart while doing so. When Cary retired, he was the young age of 81.

We begin this issue with an article on changes in financing and distribution of pharmaceuticals in the United States by Dr. Granacher. If anything displays change in the practice of medicine, this is a prime example. The stunning change, that those of us who still practice have noticed, is the contraction of suppliers for medications and the influence of medication distributors. For instance, three companies now account for more than 85% of the market share: Amerisource Bergen, Cardinal Health, and McKesson. In 2015, these three firms had a combined revenue from drug distribution of more than one-third trillion dollars.

I am sure that Dr. Blaydes would agree with me that the cost of the average outpatient physician visit pales by comparison to the cost of the patient’s medications prescribed at that visit. That is a great change from when we both started practice.

The next article is by our LMS colleague, John Patterson, MD. John profiles compulsive eaters and points out the dichotomy of eating, in that it can both heal a person or kill a person. He wraps this article around a technique that has been discussed previously in the KentuckyDoc magazines. That is the issue of mindfulness, and in particular its relationship to controlling how much one eats.

John’s article is followed by the article of Tuyen Tran, MD on analyzing the cost structure of adding a medical scribe to a physician practice. This article outlines an epitome of one of the great changes in medical practice, and that is using scribes in order to reduce the amount of time the practicing physician sits in front of an EHR monitor. Dr. Tran notes that so far, studies have documented that a physician can pick up an extra 20% to 30% of time in a daily practice day by using a medical scribe. He notes that while we must find innovative ways to enhance productivity without causing burnout, we have to perform our due diligence before adding a scribe

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Dr. Granacher writes a second article on The Psychology and Neuroscience of Change. He also includes in this article descriptions of a “cycle of change in mental strategy” that is necessary for introducing change without stressing the system or the person. What causes us all to react to change is our brain wants things to be certain. When we are confronted with a new EHR or a new demand from our medical supervisor, this interferes with our brain’s ability to predict, and it must use dramatically more biological resources in order to execute the change.

I am certain all of us have felt that internally when dealing with learning a new procedure, learning a new EHR system, or preparing for a MOC examination.

The next article, in turn, is again by John Patterson, MD wherein he profiles the compassionate nature of Dr. Blaydes. This article should bring a smile to all physicians who have had the pleasure of working with, or knowing, Dr. Blaydes in their professional careers.

After the Blaydes article, Dr. Dani Vandiviere provides a probing insight into Working Through Office Conflict. Dani gives a straightforward practical action plan for those offices or practitioners who are dealing with conflict within their office or within their relationship with another person in the employment system.

Following Dani’s article, Brian Lord gives a business insight into Content-Driven Marketing. Brian provides four tips for content marketing, which include location of where you present to the public the content of your marketing, ensuring brevity of your message, knowing what to target in order to achieve the mission of your content, and how to resist the temptation of the common urge to push your product into everything you market.

The last article is a discussion by Mark Sievers on the important issue for small business persons of performing due diligence when buying a product or service. This article is particularly important to the physician in solo or small group practice and contains a wealth of business school information in a practical, understandable format for the physician to use. He provides a list of important elements that are not all-inclusive but should serve as a useful guideline.

I cannot resist a small LMS plug. We are still in need of physicians to help us establish our mentoring program for third year medical students at the University of Kentucky, College of Medicine. Those who may be interested in serving should contact LMS CEO, Chris Hickey at the LMS Office.

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© Copyright Kentucky Doc Magazine 2017. All rights reserved. Any reproduction of the material in this magazine in whole or in part without written prior consent is prohibited. Articles and other material in this magazine are not necessarily the views of Kentucky Doc Magazine. Kentucky Doc Magazine reserves the right to publish and edit, or not publish any material that is sent. Kentucky Doc Magazine will not knowingly publish any advertisement which is illegal or misleading to its readers. Kentucky Doc Magazine is a proud product of Rock Point Publishing.

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Summer 2017 • Kentucky

Changes in Financing and Distribution

Pharmaceuticals in the United States

By Robert P. Granacher Jr., MD, MBA, Editor-in-Chief, Kentucky Doc Magazine The American Medical Association published in JAMA (May 15, 2017) a recent article by Dr. Dabora and Dr. Turaga, two Harvard Business School professors (MD, MBA), who are joined by Dr. Shulman (MD) of the Duke University School of Medicine. The following is a summary of this article.

The distribution of US pharmaceutical products is fairly simple. The physical drug product, such as a pill or vial of drug, leaves a manufacturer and is then purchased by a distributor. Distributors ship the product to retailers, where patients access their prescription medications. On the financ-

ing side, Pharmaceutical Benefit Managers (PBMs) provide services to help payers, such as insurance companies, manage their drug benefits. Payers, the sources of financing for drug benefits, include public sources such as Medicare or Medicaid, or private sources such as private health insurance and out-of-pocket payments. The financial relationships for these movements and distributions are a complex set of financial relationships that tie together the distribution side to the financing side.

Pharmaceutical product distribution has evolved over many years. Distributors play an intermediary role in the supply chain between manufacturers and retailers.

Their evolution has reduced the number of transactions that would have occurred if each retail pharmacy or healthcare practitioner had to order products directly from

manufacturers, which was the method for distribution in the first-half of the 1900s.

Ninety-one percent of all pharmaceutical sales revenue is passed through medication distributors in the United States.

Distribution of Pharmaceutical Products In recent years, the US Distribution market has become highly consolidated. Three companies now account for more than 85% of the market share: Amerisource Bergen, Cardinal Health, and McKesson. These three firms in 2015 had combined revenues from drug distributions of $378 billion dollars (more than one-third of a trillion dollars).

In 2015, generic prescriptions represented 89% of drug prescription volume. The retail pharmacy market is now divided into three major categories: chain pharmacies and

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mass merchants with pharmacies, independent pharmacies, and mail-order pharmacies. Approximately 74% of mail-order pharmacy revenue comes through 15 large firms, including CVS, Walgreens, Express Scripts, and Wal-Mart. These 15 companies generated $270 billion dollars in revenue in 2015 (one-fourth of a trillion dollars).

Of the three major categories noted above, chain pharmacies and mass merchants produced $167 billion dollars in revenue, mailorder revenue accounted $103 billion dollars, and independent pharmacies generated only $48 billion dollars in revenue.

Financing of Pharmaceutical Products The financing of pharmaceuticals in the US is primarily through Pharmacy Benefit Managers and public and private health insurance plans. By 2015, industry consolidation had resulted in three PBMs surviving: CVS Caremark, Express Scripts, and UnitedHealth’s Optum. These three controlled a 70% share of the PBM market.

With regard to public and private health insurance plans, 42% of prescription drug spending in 2015 was from private health

insurance, 30% from Medicare, and only 10% from Medicaid. Another 14% was from private out-of-pocket payments.

Physician-administered drugs to Medicare beneficiaries, such as oncology treatments and most infusions, are considered part of the medical benefit of Medicare and are covered under Part B. Oral and selfadministered medications are covered under the drug benefit, Medicare Part D. While Part D plans generally have “open” formularies (i.e., few drugs are excluded from the plan), 98% have implemented very aggressive five-tier benefit structures.

Medicare is currently precluded by law from negotiating prices with manufacturers or from setting prices for drugs purchased through Part D. (This is subject to change during the new Trump administration.).

Medicare Parts B and D are funded separately from Medicare Part A (hospital insurance). The financing is complicated. Part A is supported by the Medicare Payroll Tax. Parts B and D are supported by general tax revenues. Overall, parts B and D received 76% and 80% of their funding, respectively, from federal general tax revenues in 2015.

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As a result, Medicare required $250 billion in general tax revenues for support of these programs in 2015, and Medicare is projected to require $542 billion in annual support by 2025 (1/2 trillion dollars).

Medicaid is the public health insurance plan for low-income persons and some individuals with disabilities. It covers individuals with incomes below 138% of the federal poverty level in states that expanded Medicaid under the Affordable Care Act. Interestingly, pharmaceuticals are considered an optional benefit by Medicaid, but all states currently provide outpatient drug coverage to enrollees.

Most employer-based health insurance plans include a drug benefit. Many employers and health insurers provide pharmaceutical benefits through a PBM. The structure of these plans is similar to Medicare Part D prescription drug plans, but they are not required to offer a catastrophic drug benefit. For individuals who purchased private health insurance through an Affordable Care Act health insurance exchange, prescription drug coverage is considered an essential benefit. However, the structure of that

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In recent years, the US Distribution market has become highly consolidated. Three companies now account for more than 85% of market share: Amerisource Bergen, Cardinal Health, and McKesson.

benefit can vary across plans. In 2015, commercial health insurance was the source of payment for 49% of all retail prescriptions.

This is down from 56% in 2012.

In 2015, the average patient payment for a branded prescription drug, using commercial insurance, increased from $36.00 in 2015 to $44.00 in 2015. On the other hand, the average patient payment for a generic prescription drug has remained stable at $8.00 since 2010. Unknown to most physicians and patients, drug manufacturers provide a series of cash payments to health plans, PBMs, and distributors in the form of rebates and chargebacks. This is the result of complex pricing arrangements across the industry. The end result of these complex transactions in 2015 was $115 billion dollars. This was a whopping 27% of total pharmaceutical sales paid as a give-back or fee by manufacturers of drugs and medications to various entities throughout the drug distribution and financing systems (I wonder if Chief Justice Roberts would call this a tax or a rebate?).

Reference • Dabora MC, Turaga N & Shulman KA: Financing and distribution of pharmaceuticals in the United States. JAMA: Published online, May 15, 2017, doi: 10.1001/jama.2017.5607.

Unknown to most physicians and patients, drug manufacturers provide a series of cash payments to health plans, PBMs, and distributors in the form of rebates and chargebacks.

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Physician Health and Well Being

Eating can Heal.

Eating can Kill.

CHIEF COMPLAINT:

“I’m a compulsive eater and it’s killing me.”

By John A. Patterson MD, MSPH, FAAFP This new patient was a desperate, mid-career physician, referred to me by his cardiologist for mindfulness training and stress-reduction. He confessed to regularly eating as much as 5,000 calories in a single meal. His facial expression and body language spoke of his hopelessness and exhaustion. In a telling example of the crucial importance of body awareness, he consistently expressed difficulty feeling physical sensations in his body during body scan meditation. He was literally out of touch with himself. I was concerned and deeply saddened by the plight of this fellow physician- a man who worked fulltime addressing his patients’ health while dangerously neglecting his own. I feared the worst and, indeed, his words were tragically prophetic.

He died 2 months later from cardiac complications of emergency abdominal surgery.

His son later told me that his father had actively embraced mindful eating and other mindfulness-based stress reduction practices he had learned in our two meetings together- an initial individual consultation and a follow-up group class. He began to realize that he rarely knew whether he was actually hungry. He simply ate and ate and ate. He also began to realize he didn’t always taste his food. His growing awareness of his relationship with food gave him a glimmer of hope. He only wished he had begun this important, potentially life-saving, self-care skill much earlier in the course of his chronic morbid obesity, hypertension, diabetes, venous insufficiency, heart failure, renal failure and depression.

Where is your attention when you eat?

Do you love the pleasure of eating so much that you overeat from sheer enjoyment rather than from physiologic hunger cues? Do you overeat as a self-soothing antidote for emotional stress, anxiety or depression? Or do you consider eating a necessary but boring interruption in your busy day at home and work and overeat while reading, viewing screens, driving or talking? If either of these eating patterns describes you, the power of your attention is being used unskillfully. Your health could suffer simply because of misplaced attention.

What is mindfulness?

Mindfulness is defined as paying attention to present moment experiences, intentionally and nonjudgmentally with openness and curiosity. Mindful eating means paying complete attention to this plate, this bite, this sip, in this moment. It means paying more attention to the food itself and less attention to the distractions all around you and inside your mind.

In particular, the regular practice of body scan meditation increases the capacity for mindful eating, accurate assessment of hunger cues and successful weight management. With practice, you can train yourself to experience your food desires and cravings as nothing more than thoughts and allow them to simply come and go like any other thoughts- without eating ‘just one more.’

Mindfulness is the world’s leading behavioral, mind-body practice for promoting health, managing stress-related chronic conditions and enriching your experience of being alive. Mindful eating and food preparation can be an important ingredient in your overall practice of mindful living and

enhance your overall relationship with foodits production, distribution, preparation and consumption. Those with eating-related conditions such as overweight, obesity, anorexia nervosa, bulimia, binge-eating disorders, body image disorders and night-eating syndrome can also benefit by including mindful eating in an overall treatment plan.

Eating mindfully Mindful eating is a basic mindfulness skill. Bringing attention to the act of eating can transform an ordinary activity into a health-supporting, life-affirming practice. It can be a physician’s ally in assisting a patient in adhering to dietary guidelines for chronic disease management. Mindful eating can also be part of a preventive, behavioral, lifestyle program to promote health and prevent disease. Simply changing how we eat can transform our relationship with ourselves, our body, our weight, our medical treatment plan and our overall health.

Mindfulness practices can help manage the stress that may contribute to overeating and help with weight management without actually ‘dieting.’

Seven kinds of hunger A useful review of the various ways to conceive of hunger is offered by pediatrician Jan Chozen Bays in her book Mindful Eating–A Guide to Rediscovering a Healthy and Joyful Relationship with Food. Based on her work as a physician and mindfulness meditation teacher, she helps patients and families re-connect with health-promoting, physiologically based hunger signals and avoid the temptation of false appetites. Bays describes seven types of hunger. She suggests that we bring our attention to these

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...he began to realize that he rarely knew whether he was actually hungry.

He simply ate and ate and ate.

seven types of hunger on purpose rather than being hijacked and victimized by their often unconscious influence over our eating habits. Observing your eating experience this way can put you in charge of your food consumption and your health.

1. Eye hunger: To avoid over-eating and to satisfy eye hunger, intentionally appreciate the visual appearance of your food as you begin to eat.

2. Nose hunger: Much of your sense of taste comes from your sense of smell rather than your taste buds. Honor this aspect of your eating experience by focusing on the smell of the food you are about to eat.

3. Mouth hunger: So many of your preferred tastes are socially conditioned from your family and acquired eating habits. Can you eat with curiosity, openness and experimentation as you add more or less of different spices and seasonings?

4. Stomach hunger: Abdominal rumbling, growling and dyspepsia may suggest hunger when the body doesn’t really need to eat.

These sensations may reflect stress, anxiety or an artificial eating schedule you may have developed out of social convenience more than physiological need. Listen to overall hunger cues before trusting stomach hunger.

5. Cellular hunger: This is the underlying physiological need being addressed by

hunger and eating. Becoming more attuned to your body through body scan meditation and other mindfulness practices can put you back in touch with this deeply physiological ‘true’ hunger.

6. Mind hunger: Your food choices may sometimes be driven more by advertising and fad diets than your true body needs.

Pay attention to your food as you eat. Avoid eating while watching television. Eat some meals alone and really tune in to the full experience- physical, mental and emotional.

7. Heart hunger: Your eating choices may sometimes be driven by a desire for comfort foods and feeding emotional needs that you can address in a healthier way. A hot bath with candlelight, journaling, talking with a good friend or walking in nature are low calorie/high nutrition options for feeding heart hunger.

Practical, ancient meditation practices and modern lifestyle medicine can be combined to help physicians and their patients achieve overall health goals through mindful eating.

• Patterson, John A., MD. Mindfulness Class Audio Files. http://www.mindbodystudio.org/?page_id=1594 About the Author Dr. Patterson Chairs the Lexington Medical Society’s Physician Wellness Commission and is a KMA Community Connector. He is board certified in family medicine, integrative holistic medicine, mind-body medicine, hatha yoga and is a certified Physician Coach. He is Associate Professor of Family Medicine at UK and teaches Mindfulness-Based Stress Reduction for the UK Wellness Program and Saybrook College of Integrative Medicine and Health Sciences (San Francisco). He owns Mind Body Studio in Lexington, where he offers individual consultations and group classes, specializing in stress-related chronic conditions and burnout prevention for health professionals. He can be reached through his website at www.mindbodystudio.org

Resources • Bays, Jan Chozen. MD. (2009) Mindful Eating–A Guide to Rediscovering a Healthy and Joyful Relationship with Food. Boulder: Shambhala Publications.

• Patterson, John A., MD. Mindful Eating Instructions. http://www.mindbodystudio.org/?page_id=1503

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Medical Scribes in a Physician Practice a Cost Analysis

By Tuyen T. Tran, MD Most of us have personally experienced the impact of electronic health record (EHR) and required clinical documentation, which have resulted in decreased productivity and decreased job satisfaction. Physicians and nurses have traditionally used clinical documentation to record and convey information as well as treatment plans to other members of the care team. However, clinical documentation has evolved to justify reim-

bursement and serves many purposes which may not contribute directly to patient care.

Adding to this complexity is the requirement to implement an electronic health record (EHR). It was intended to record history-rich notes to reflect gathered information for diagnosis and treatment plans.

The EHR was supposed to improve productivity, quality, and outcomes. Regardless of whether these changes in clinical documentation improve or distract from patient care, the question is whether physicians can iden-

tify solutions, such as medical scribes, to facilitate the navigation of this very complex process. What are the financial and lifestyle improvement cost benefit analyses?

Estimates are that physicians click an EHR roughly 750-4000 times during a full day in the clinic or hospital! A recent study at a community hospital in Pennsylvania revealed that ED physicians spend 43% of their time documenting and entering data, roughly twice as much time as that spent on direct patient care. (Hill & Sears, 2013)

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A recent systematic review examining the benefits of medical scribes revealed potential improvements in clinician satisfaction, productivity, time-related efficiencies, revenue, and patient-clinician interactions. (Hill & Sears, 2015) Although, the authors commented that the reliability of the data was limited, it is clear that there is mounting evidence demonstrating added value of a medical scribe. Full realization of a medical scribe’s added value remains to be demonstrated; but, it seems to trend very favorably.

In regards to the financial impact, if the cost of the scribe (usually a flat hourly rate) is less than or equal to the additional daily revenue gained, then the medical scribe is feasible. For example, let’s examine some data from an actual ED scenario. (Hill & Sears, 2013) (Specific gains will obviously depend upon the practice and demographic characteristics.) Saint Peter’s University ED realized the following improvements after the implementation of scribes: 1. 8.52% improvement in the average patients seen per hour, 2. 5.87% improvement in average RVU per patient, 3. 14.82% improvement in average RVU per hour, 87% improvement in downcoded charts,

4. 15.85% improvement in length of stay for adult patients, 5. 26.4% improvement in length of stay for pediatric patients, and 6. roughly 40% improvement in door-todoctor times for patients.

After appropriate extrapolation of this information, the translation of this particular practice is each medical scribe earned roughly $20 per hour, each physician earned roughly $180 per hour, and the scribe enhanced the productivity of a physician by about 20%. The real return on investment (ROI) occurs when this enhancement is represented in reduction of physician coverage. That is, for every physician hour cut, the practice can maintain budget-neutral (20% enhanced productivity x $180 = $36 with a scribe only costing $20) and acquires roughly nine medical scribe hours. With the budget-neutral trade-off, the improved coding and RVU generation results in tremendous financial gains. At this particular hospital’s ED, every 1% gain in RVU resulted in $16,000 annual revenues, and each 1% improvement in productivity gained $32,000 annual income.

In a prospective, controlled study, Bank and associates (2013) compared standard visits (20-minute follow-up and 40-minute

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new patient) to a scribe assisted system (15-minute follow-up and 30-minute new patient) in a cardiology clinic. Accounting for both direct and indirect revenue savings, the group demonstrated a $2500 savings per patient. And for hospitalists, a recent study noticed an increase of Case Mix Index (CMI) from 0.26 to 0.28 after the implementation of scribes. Translating this change to dollars, each CMI increase of 0.1 yielded about $4500 per patient. (Kreamer, 2015) Physicians often work late after their shifts or days, spending up to 30% of their time documenting and performing other non-medical tasks. It’s a burden that distracts from what attracted us to our profession – patient care. This leads to lower job satisfaction, lower quality of life, and shortened careers due to burnout. But, these long hours reflect physicians’ dedication to medicine! How ironic that we often advise our patients to balance work and life, yet we fail to incorporate the same advice. How often do we advise our patients to work smarter and not harder?

So, how do physicians want to spend the extra 20-30% of time a medical scribe affords us? We can increase income by seeing more patients. We can enjoy the satisfaction of devoting more time to each patient.

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Or we can simply leave work on time and invest that time in family and friends. It’s a very common scenario and conflict all physicians confront.

We must find innovative ways to enhance productivity without causing burnout. We were trained to care for patients, not to perform clerical work! Using a scribe will allow us to spend more time with patients. Using a scribe will eliminate almost all after hours charting. Using a scribe will help ensure that charts are completed daily. What we choose to do with the time saved is up to us; but let’s agree that getting charts done by the end of the work day is better than completing them at nights and on the weekends.

References 1. Bank AJ, Obetz C, Konrardy A, et al.

Impact of scribes on patient interaction, productivity, and revenue in a cardiology clinic: a prospective study.

ClinicoEconomics and Outcomes Research: CEOR. 2013;5:399-406. doi:10.2147/CEOR.S49010.

2. Hill, Robert G., Lynn Marie Sears. 4000 Clicks: a productivity analysis of electronic medical records in a community hospital ED. AM J Emerg Med. Sep 23, 2013. Vol. 31, Issue 11, 1591-1594.

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Full realization of a medical scribe’s added value remains to be demonstrated; but, it seems to trend very favorably.

3. Kreamer, Jeff; Rosen, Barry; Susie-Lattner, Debra; Baker, Richard. 2015 The economic impact of medical scribes in hospitals. The Free Library (May, 1), https://www.thefreelibrary.com/The economic impact of medical scribes in hospitals. -a0414692559 (accessed May 17 2017) 4. Shultz, Cameron G., Holmstrom, Heather L. The Use of Medical Scribes in Health Care Settings: A Systematic Review and Future Directions. JABFM. May–June 2015 Vol. 28 No. 3 About the Author Tuyen Tran, MD emigrated from South Vietnam after the war. He completed his undergraduate in biology/chemistry and medical school at the University of Missouri – Kansas City in a six year program. His is currently boarded in internal medicine and addiction medicine.

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The Psychology and Neuroscience of Change

By Robert P. Granacher Jr., MD, MBA, Editor-in-Chief, Kentucky Doc Magazine As physicians, we are required to master changes on a daily basis. Very shortly, we will have to deal with changes in the Accountable Care Act. At some point, we will be required to deal with changes in our electronic health record system. Medical organizations are struggling with the demands of physicians to make changes in the Maintenance of Certification (MOC) process. Everyone wants some kind of change from us, and adaptation is the watchword.

Change is integral to life, and it accounts for evolution. It is certainly built in to all biological systems on this planet. If change has always been an integral part of life, why do we resist it so? Why, in every generation do we have Luddites? What goes through a person’s mind when they are informed of or predict change? Is my position safe? What will I have to do? What will I need to know?

Am I capable and confident with new direction? Do I have any say about this, or any control over what is about to happen? Do I really need to change? Do I have time for this? How am I going to do that and this?

How will this impact what I have already done? (Crowder and Friess, 2013).

The Psychology of Change As Crowder and Friess (2013) describe in their book, the amount of changes and their effect upon us is protean. Their text describes Theory Z: This is described as “consensus decision-making,” and it establishes strong bonds of responsibilities between team leaders and team members

with a high importance placed on finding people with the right skills, both “hard” skills (e.g., technical), and “soft” skills (e.g., creative thinking) for team creation.

Consensus decision-making is currently taught to medical students by incorporating advanced registered nurse practitioners, physician assistants, doctorates of nursing, and a plethora of other medical providers as members of medical teams.

These new team demands are challenges to us as individuals. The psychology of change has been studied by self-affirmation research (Cohen and Sherman, 2014).

Whether people see their environment as threatening or safe marks a dichotomy between the perceptions of environmental challenge to one’s self-integrity.

Psychological threat represents an inner alarm that arouses vigilance and the motive to reaffirm the self. Psychological threat can sometimes trigger positive changes, but it also can impede adaptive coping.

As Cohen and Sherman (2014) point out in their article on the Psychology of Change, self-affirmation is necessary for coping strategies and adaptations. Figure 1 describes a cycle of change in mental strategy. In the first step, when the person begins to contemplate change, it is not unusual to deny that this is possible. As contemplation continues, the individual comes to the realization that the expected change is possible (step 2). As the individual merges into the process of change, as step 3 indicates, questioning begins. In step 4, the person develops an action plan to make the changes, and then when success in the change is apparent, the new behavior is maintained... what has been possible has now occurred, noted in step 5.

What originally began as a threat to the self noted in step 1, ends in step 5 with the changes; the maintenance of success is based on a continuing realization that the behavior has successfully changed and continuing practice is required to keep the new behavior in place.

The Neuroscience of Change The study of the brain, particularly within the fields of social, cognitive, and affective neuroscience, is beginning to provide some underlying brain insights that can be applied in the real world (Lieberman, 2007). Two themes are emerging from social neuroscience. First, much of the motivation of human beings driving social behaviors is governed by an overarching organizing principle of minimizing threat and maximizing reward (Gordon, 2000). Secondly, several domains of social experience draw upon the same brain networks to maximize reward and minimize threat and are also the same brain networks used for primary survival needs (Lieberman and Eisenberger, 2009).

The "SCARF" model developed by David Rock (2008), includes five domains of human social experience for collaborating with others: 1. status, 2. certainty, 3. autonomy, 4. relatedness, and 5. fairness.

The SCARF model uses the old approachavoid response that has been reported in the medical and psychological literature for generations. This principle represents the likelihood that when a person encounters a stimulus (the new change), the brain will either tag the stimulus as “good” and engage in the stimulus (approach), or the brain will tag the stimulus as “bad,” and then will disengage from the stimulus (avoid it). The approachavoid response is a survival mechanism that has been in humans since caveman walked

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Summer 2017 • Kentucky the earth and it is designed to enable people to stay alive by quickly and easily remembering what is good and bad in the environment (an automatic brain valence [+-] system).

However, this causes substantial physiological and psychological stress for persons who are adapting to change. The amygdala, a small almond-shaped object that is part of the limbic system, plays a central role in humans for conditioning us to whether something should be approached or avoided. By using small cycles of change, as noted in Figure 1, a person can more easily adapt to required changes, necessary for them to adjust to their environment and to teams.

Our brain wants things to be certain. The brain is a pattern-recognition machine that is constantly trying to predict the near-future.

The brain wants to know the patterns occurring moment-to-moment. It craves certainty, so that prediction is possible.

When we are confronted with a new electronic health record or a new demand from our medical supervisor, this interferes with the brain’s ability to predict and it must use dramatically more resources, involving the more energy-intensive prefrontal cortex to process moment-to-moment experiences.

This uncertainty, in turn, produces an “error” signal in the orbital frontal cortex and takes the attention away from an individual’s goals, forcing him/her to pay attention to the “error.”

By understanding the domains in the SCARF model noted above and finding personalized strategies to effectively use brain insights for small cycles of change, we can become better leaders, managers, facilitators, coaches, teachers, and physicians.

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FIGURE 1:

THE CYCLE OF CHANGE

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IT IS POSSIBLE. Maintenance

Resources • Cohen, GL and Sherman, DK (2014). The psychology of change: self-affirmation and social psychological intervention. Annual Review of Psychology; 65: 33-371.

• Crowder, JA and Friess, S (2013). Systems Engineering Agile Design Methodologies.

New York: Springer Science + Business.

• Gordon, E (2000). Integrative Neuroscience: Bringing Together Biological, Psychological, and Clinical Models of the Human Brain.

Singapore: Harwood Academic Publishers.

• Lieberman, M (2007). Social cognitive neuroscience: a review of core processes.

Annual Review of Psychology; 58: 259-289.

• Lieberman, MD and Eisenberger, NI (2009). Neuroscience: Pains and pleasures of social life. Science; 323 (5916): 890-891.

• Rock, D (2008). "SCARF": A brain-based model for collaborating with and influencing others. Neuroleadership Journal; 1:44.

Our brain wants things to be certain. The brain is a pattern-recognition machine that is constantly trying to predict the near-future.

NO, NOT ME. Pre-contemplation

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WELL, MAYBE.

LET'S DO THIS.

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WHAT DO I DO NOW? Preparation

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ANNOUNCEMENTS AWA R D S N E W S TA F F EVENTS AND MORE

EMAIL brian@rockpointpublishing.com TO SUBMIT YOUR NEWS

Baptist Health Oncologist Co-Authors New England Journal of Medicine article Dr. Firas Badin, MD, with Baptist Health Medical Group Hematology and Oncology, co-authored an article featured in the June 22 issue of The New England Journal of Medicine.

The article, “First-Line Nivolumab in Stage IV or Recurrent Non– Small-Cell Lung Cancer,” reported findings of a Phase III research study that compared the effectiveness of the immunotherapy drug nivolumab, which is marketed as Opdivo, with standard-of-care chemotherapy in 541 patients with previously untreated or recurrent non-small-cell lung cancer.

Q: How many Central Kentuckians read Health&Wellness Magazine every month?

Baptist Health Lexington enrolled patients in the clinical trial, and Badin served as the local principal investigator. Findings could help oncologists better predict which patients are likely to receive the most benefit from immunotherapy as a first-line treatment based on the unique characteristics of their tumor.

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Kentucky Has Highest Hepatitis C Rate; KentuckyOne Health Encourages Testing Kentucky has the highest infection rate of the

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liver disease in the nation Kentucky is no stranger to the hepatitis C virus. More than 38,000 Kentuckians are currently infected with hepatitis C, according to estimates from the Kentucky Department for Public Health. The contagious liver disease can cause liver cancer or cirrhosis, and is spread by contact with an infected

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Summer 2017 • Kentucky person’s blood. It is often contracted by sharing needles or other equipment to inject illegal drugs, sexual contact with someone who has an STD or HIV infection, or getting a shot, tattoo or piercing when the needle has infected blood on it. It can also be passed on to babies at birth by a mother with the disease.

“Hepatitis C can have serious consequences, which is why it’s important to be tested for this disease,” said June Yong, MD, KentuckyOne Health Gastroenterology Associates. “A onetime screening blood test is recommended for people who are at risk, so treatment can begin right away.”

To help combat this growing epidemic, KentuckyOne Health is encouraging community members to learn more about the disease, and to get tested for hepatitis C. While the disease is curable, it can take decades for symptoms to appear. About half of those with the disease don’t know they’re infected.

According to a 2017 state assessment from the Kentucky Department for Public Health, Kentucky leads the country for hepatitis C cases.

The assessment found that from 2008 to 2015 – the last year with available data – Kentucky had the highest rate of new hepatitis C cases in the United States, with the highest rates occurring in the Appalachian region and northern Kentucky.

It’s estimated that 3.5 million Americans are living with hepatitis C, according to the Centers for Disease Control and Prevention (CDC). It’s a disease that reportedly kills more Americans than any other infectious disease.

Hepatitis C is a disease that has affected many familiar faces over the years, from baseball star Mickey Mantle, musician Steven Tyler, actor Larry Hagman, and singer Gregg Allman of the Allman Brothers, who recently passed away as a result of liver cancer complications.

Community News continued on page 18...

DID YOU KNOW? • 38,000+ Kentuckians are infected with Hepatitis C.*

Hepatitis C Awareness

• It’s curable, but 50% don’t realize they are infected.

• Chronic Hep C can lead to cirrhosis, liver cancer or failure. *Source: KY Dept for Public Health

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Baptist Health Corbin honored with Mission: Lifeline achievement award (Corbin, KY) Baptist Health Corbin has received the Mission: Lifeline® Bronze Receiving Quality Achievement Award for implementing specific quality improvement measures outlined by the American Heart Association for the treatment of patients who suffer severe heart attacks.

Every year, more than 250,000 people experience an ST elevation myocardial infarction (STEMI) the deadliest type of heart attack caused by a blockage of blood flow to the heart that requires timely treatment. To prevent death, it’s critical to restore blood flow as quickly as possible, either by mechanically opening the blocked vessel or by providing clot-busting medication.

The American Heart Association’s Mission: Lifeline program’s goal is to reduce system barriers to prompt treatment for heart attacks, beginning with the 9-1-1 call and continuing through hospital treatment. “Baptist Health Corbin is dedicated to improving the quality of care for our patients who suffer a heart attack, and the American Heart Association’s Mission: Lifeline program is helping us accomplish that goal through nationally respected clinical guidelines,” said Anthony Powers, Vice President. Powers’ responsibilities include Cardiac Services. Powers went on to say, “We are pleased to be recognized for our dedication and achievements in cardiac care, and I am very proud of our team. We would also like to thank our area Emergency Medical Services (Whitley, Knox, Laurel, McCreary, Bell, Air-Evac, PHI and Air Methods) for their collaborative effort in helping achieve this award.”

“We commend Baptist Health Corbin for this achievement award, which reflects a significant institutional commitment to the highest quality of care for their heart attack patients,” said James G. Jollis, MD, Chair of the Mission: Lifeline Advisory Working Group. “Achieving this award means the hospital has met specific reporting and achievement measures for the treatment of their patients who suffer heart attacks and we applaud them for their commitment to quality and timely care.”

Baptist Health Corbin earned the award by meeting specific criteria and standards of performance for the quick and appropriate treatment of STEMI patients by providing emergency procedures to re-establish blood flow to blocked arteries when needed.

Eligible hospitals must adhere to these measures at a set level for at least one consecutive 90 day interval.

UK HealthCare and Cincinnati Children's Hospital Announce Potential Pediatric Heart Care Partnership At UK HealthCare, the needs of patients and families come first in everything we do. In the interest of providing Kentucky families with complex care close to home, UK HealthCare has entered the first stages of a partnership with Cincinnati Children’s Hospital to form one pediatric heart care program at two locations.

“We commend Baptist Health Corbin for this achievement award, which reflects a significant institutional commitment to the highest quality of care for their heart attack patients.”

—James G. Jollis, MD, Chair of the Mission: Lifeline Advisory Working Group

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Kentucky

Profile in Compassion

A Heart Doctor with a Kind Heart

By John A. Patterson MD, MSPH, FAAFP Growing up on a busy farm in rural Virginia, milking cows before and after school every day, Cary Blaydes assumed he would grow up to become a farmer. When his father convinced him to consider medicine instead, his goal was to go back home as a general practitioner and help the people he grew up with. Luckily for Central Kentucky, his plans changed.

Medical training Dr. Blaydes graduated from the University of Virginia (UVA) Medical School and completed a two-year rotating internship at the University of Rochester School of Medicine.

After two years in the U.S Navy and two more years as an internal medicine resident (Rochester), he returned to UVA for further training in internal medicine. His work on the cardiology rotation caught the eye of the chief, who convinced him to take a cardiology fellowship. Though he still had an urge to return to a rural area as a general internist, he recognized that maximizing his cardiology training would require an urban setting.

And although he liked academics, after a year as instructor in the UVA cardiology section, he knew he preferred working with patients over academia and research.

Why Lexington?

Several physicians Dr. Blaydes had trained with in Charlottesville and Rochester gave him good reports of their experience joining Lexington Clinic. He saw this as a middle ground between academic medicine and

solo-practice. Like many Lexington Clinic physicians, he served as a primary care physician for a panel of patients and also served as a cardiology consultant. He did this for forty-six years (1964-2010) until his retirement at the age of eighty-one.

On being a physician Cary says “I always considered it a privilege and an honor to help in people’s illnesses. At the end of the day, regardless of how busy I had been or how hard I had to work, I always felt there was something good I had done that day, something worthwhile.

The satisfaction of helping people was the most important thing. I’d occasionally get discouraged but still, most of the time, feel like I had done something worthwhile. I think one becomes addicted to wanting to help people and make sacrifices along the way. It became a way of life. Despite all the computer and technology help from the nurses at the clinic and the hospital the last few years, at age eighty-one, it was just too much to keep up with the computer-based record keeping.”

On the doctor-patient relationship “The most important thing for me was doing the best I could for the patient. I was interested in the patients as people. That was the hardest thing about retiring. It is very satisfying to help people. Patients sense when you want the best thing for them.

We were indoctrinated in medical school in the non-directive interview. I would try my best to listen and decide if they needed reassurance, referral or a prescription. It was sometimes awkward when patients were deeply emotional, but I felt flattered that they trusted me that much. I had to rise to

the occasion. Sometimes I got behind in my schedule as a result. If they brought up their faith, I would try to reinforce it to help their condition, whatever religion or beliefs- without bringing my beliefs in.”

Relationships with colleagues Cary says “I always tended to be a little self-critical and ask ‘what did I do wrong’ when things didn’t go well. I always wondered what I could do better. I think the nurses appreciated that. When I asked colleagues a patient management question, I tended to remember those answers better than anything I read in a book.”

Cardiologist Dennis Kelly MD says "Cary is very kind hearted. When he was with a patient, he took whatever time was needed to listen. I never heard him complain about a patient being too demanding."

Cardiologist Jamie Jacobs MD says, “Cary is a physician’s idea of a physician- compassionate, knowledgeable, caring and giving.

He would always take whatever time was needed to provide the best patient care. The first and last patient of the day got the same quality of expertise. In all his years at the clinic, he always maintained a very contemporary approach, always keeping up with current diagnostic and treatment guidelines.

We all admire him as a physician and a gentleman. In a word- superlative!”

Endocrinologist Tom Goodenow MD says, “Cary is the most competent physician I’ve ever met. He made hospital rounds both morning and evening and kept up-to-date so he could provide the best care to patients.

It’s hard to express how much his patients praised him. The staff worshipped the ground he walked on. His was also the only office messier than mine.”

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Summer 2017 • Kentucky

Cardiologist Allen Cornish MD says, “A few years ago I was privileged to give a talk about Cary at both his retirement reception and when we established the Cary Blaydes Resource Center. I had asked nurses at St Joseph to send comments to me. They talked about Cary's ability to heal patients by just listening and looking and making changes in their care, not with technology but by just knowing what was needed.

This only comes from a caring physician.

When we covered him on weekends we often found that he had called the nurses to check on his patients even before we made our rounds. I don't think it was because he didn't trust us. It was because he cared so much about them he had to know how they were doing and make his own little tweaks to their care. I still think about what Cary would do in situations where I get frustrated and impatient. I always feel he is watching over my shoulder.”

Ardis Hovan MD, infectious disease specialist, AMA past president and current chair of the World Medical Association, says “As a kind, compassionate physician and a cardiologist, Cary was always willing to care for those sometimes very aged patients with multiple medical issues. His patients adored him. I know personally because he provided care to my mother for many years with patience and always a sense of what was needed and what was not. As a colleague, I always knew that he would answer my questions thoughtfully. Somehow he knew every piece of new information about a condition or a treatment. He was an encyclopedia!”

Oncologist John Cronin MD says simply, “Cary Blaydes is the finest physician I’ve ever known- the most compassionate and the best informed. He is the personification of the Norman Rockwell image of the caring physician.”

There will always be a real need for doctors.It is extremely satisfying because you are helping people.

– Cary Blaydes

Advice to prospective medical students Cary says, “There will always be a real need for doctors. You will always be needed and be financially secure.

It is extremely satisfying because you are helping people. Always focus on working with people and choose a specialty that makes you happy.”

At age eighty-eight, Cary Blaydes continues to attend grand rounds at UK and teach medical students at Salvation Army’s UK Student-Run Free Clinic. Students and patients alike continue to see the best in medicine from this heart doctor with a kind heart.

About the Author Dr. Patterson chairs the Lexington Medical Society’s Physician Wellness Commission, is past president of the Kentucky Academy of Family Physicians, is board certified in family medicine and integrative holistic medicine and is a certified Physician Coach. He teaches Mindfulness-Based Stress Reduction for the UK Health and Wellness Program and Saybrook College of Integrative Medicine and Health Sciences (San Francisco). He owns Mind Body Studio in Lexington, where he offers integrative mind-body medicine consultations, specializing in stress-related chronic conditions and burnout prevention for health professionals. He can be reached through his website at www.mindbodystudio.org

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Summit Mediation

Working Through Office Conflict

By Dr. Dani Vandiviere

Do you often see new faces in your practice?

When it comes to practice growth new faces of patients is a good thing, but not when those new faces are staff members.

The constant revolving door of office and medical staff is killing more practices now than ever before.

The success of today’s medical practice is not only measured in the accounts receivables and overhead, but the cost of office conflict.

You cannot avoid conflict and disagreements within the office. That is human nature. The problem is when conflict is dealt with as opposition instead of opportunity. At times, every office needs to change the mindset of the staff, and sometimes the Physician may need a change of mindset also.

Physicians are not only required to practice medicine, but practice good business as well. The revolving door is a big business expense that can often be avoided. The upset of employees leaving and the stress of training new employees is disruptive to any office. The Center for American Progress estimates that for workers earning less than $50,000 annually, it will cost physicians approximately 20% of that employee’s salary to find a replacement.

Believe me when I say that your patients notice when the familiar faces are no longer there. When this happens too often, some of your patients begin to worry about the competency of care. When they must reexplain everything to someone new each time they call your office they tend to start looking for another physician.

It is far more cost effective and a stress reliever to deal with conflict in a way that fixes a problem. Firing is not always fixing.

Addressing the issue is fixing.

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Summer 2017 • Kentucky

Your patients notice when the familiar faces are no longer there.

Discussing the issues that come to your attention with your staff and asking for ideas is the best practice. Often a pattern is emerging. If you want the best staff give them a voice and listen to what they say and how they say it. Value them as an employee, and they will add value to your practice. Everyone just wants to be heard, and little will change until they are heard and understood.

To understand what is going on in your practice you need to understand what your staff is doing and why. Not everyone handles a task the same way, one size does not fit all when it comes to the way people work. You must intervene when patient care, morale of staff, your reputation, or finances are at risk.

It is your administrator’s job to have a finger on the pulse of the office. That can be a difficult task when added to the multitude of tasks they are already faced with. It is even more difficult if the issue causing the conflict turns out to be one of your partners, the administrator, or perhaps even you. However, it still must be addressed, and the way it is approached is crucial.

What can be done? ❏❏ Gather your facts. Every conflict has a back story of the events. ❏❏ Look for patterns. Does the same people keep popping up in the issues? ❏❏ Communicate. Meet with individuals to discuss behaviors and issues.

Have those difficult conversations.

Some people do not know how to express their concerns in a way that is effective and understood. Listen closely and try not to be judgmental.

Share the comments of patients, staff, colleagues concerning the issues to explain how the behavior is effecting the office. They may be unaware of the effect on others. If they disclose that they're dealing with a personal or professional crisis, find out what you can do to help them better manage their stress. ❏❏ If you do not have a hand book you may need to create one. If not, then do a policy manual and have everyone sign it to verify they are aware of

Turn your staff into a team, not just a bunch of individuals going in several directions. Give them the tools to work together.

the policies. Even your partners.

Everyone's policy should include a mediation clause that allows you to bring in a third party to help settle certain disputes. Not all disputes can be settled by an administrator and a good administrator will recognize when they need to bring in a mediator. This is also the best way to avoid any litigation from the disruptive employee. ❏❏ Hold monthly meetings, lunch time works well, more often if there is an issue to resolve. This is a good opportunity to educate your staff on the state of the office and any new trainings or changes headed their way. ❏❏ Turn your staff into a team, not just a bunch of individuals going in several directions. Give them the tools to work together.

Communication is the key. We see our staff more than we see our families. Just like families you must deal with some difficult personalities. Families members however, are much more difficult to remove.

About the Author Dr. Dani Vandiviere is a conflict and bullying specialist and CEO of Summit Conflict Resolutions and Trainings. She is a past President of the Bluegrass Continuity of Care Association, a founding member of KY Association of Senior Services, a member Association for Gerontology, and an Elder Care Conflict Trainer and Mediator. She also offers training programs for the workers in the Eldercare industry, medical professional, elder’s families, organizations and businesses.

To learn more contact Dr. Dani at www. summitcrt.com, dani@summitcrt.com or 859-305-1900.

Summit Conflict Resolution & Trainings 400 Etter Drive, Suite 1 Nicholasville, KY 40356 www.summitcrt.com 859-305-1900 | contact@summitcrt.com Conflict Resolution & Trainings 400 Etter Drive, Suite 1 Nicholasville, Kentucky, 40356 www.summitcrt.com

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Medical Business Marketing

Content Driven Marketing

By Brian Lord Content driven marketing is a form of marketing focused on creating, publishing and distributing content for a targeted audience in niche magazines, local publications, with your website, and with social media for the specific purpose of educating the targeted audience.

Content Marketing is not a tactic, but is a strategy. Think of farming by tilling the fields, planting the seeds, watering and finally harvesting the crop. It’s not a trick, but a form of creating educated clientele.

The intent of Content Marketing is not just to get cool articles or build your ego, but to deliver information and services that truly help people. By reaching your target with

content, you help them know you care.

Consumers tend to do business with those they believe care about them.

Content Marketing is not about the immediate selling of your services, but is powerful in the long term. It is about educating and sharing. It is about giving before getting. It is about respecting your audience’s intelligence to make their own decisions if provided with the right information. We do this by providing them with clear, valuable and useful information to address their needs. Information breeds credibility which causes the person to seek more information that in-turn drives them into making positive contact and opt-in decisions that mutually benefit both parties.

A misconception that some have about Content Marketing is that it only applies to your website. Your website will be one of your biggest engines in the delivery of content but it should not be the only tool in your tool box. Some tools – like print magazines – reach a target audience

you with articles, testimonies and even feature stories to help people know how you are able to help them. Content-driven Marketing is a great tool that, if positioned correctly, can spread wide and impact a lot of people: a published article or story in a magazine may be placed on your website, the magazine's website, your social media and the magazine's social media. You may then send it out in newsletters, e-mails etc. to increase the reach. Past clients might even share your stories or articles on their social media with friends. Your information is then impacting people, and you are not only a professional, but a local expert on the presented topic.

As mentioned above, the information that you deliver must be valuable and useful. It also must connect in a branding sense to who you are as a company and what you deliver. If the messaging is incongruent with your branding, the mixed message will be recognized immediately in an unfavorable manner.

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4 Tips for Content Marketing 1. Location, Location, Location Where you place your content is key. Reach greater numbers of potential customers by placing content on high-traffic, targeted media. People who are going to learn from you (and learn how you can help them) need to see your articles, your testimonies and stories about your business and your team.

2. Brevity If you’re about to launch an aggressive content marketing campaign, it can be easy to let this key aspect fall off the radar. Make sure all of your content is succinct and to the point. Go through each piece of content line by line and eliminate all unnecessary verbiage. Be quick and to the point.

YOUR CONTENT PUBLISHED IN PRINT

SOCIAL

PRINT

PUBLISHER SHARES CONTENT

MAGAZINE READERS BECOME YOUR READERS

YOUR WEBSITE

HANDOUTS

Add your content from print to your website.

Boost SEO with links.

Feature stories make great handouts when printed and distributed.

PRESENTATIONS Use digital versions of print content as part of a sales presentation.

YOUR SOCIAL Share and promote your print content on Social Media.

RE-PUBLISH You own your content.

Consider publishing on other sites/magazines.

EMAIL MARKETING Distribute digital versions of print content to your e-mail subscribers.

3. Know what you aim to achieve with your content Apart from your messaging, you need to know your target audience. Do you want to reach 10 people, or 10, 000? Also, each time you produce a piece of content, you need to review your audience and explore what interests them. Measure which articles receive responses from people through phone calls, e-mails and online clicks.

Adjust your next piece of content accordingly and adapt your campaign as you roll out your content.

Flexibility is key.

4. Resist the temptation to push product into everything Marketers are often tempted to slip a product message into everything, but some pieces of content are more about how people feel about a brand and what it stands for and less about the sale. In the Content Driven approach, avoid referencing products. People tend to switch "off " if they think you’re trying to sell them something.

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Sales

Buyer Due Diligence SMALL BUSINESS SALES

By Mark Sievers One of the most important aspects of a business sale is the due diligence process that the buyer and perhaps her/his advisors undertake.

The buyer due diligence process serves to verify information represented by the seller and to also gain a more complete understanding of the business.

It’s a critical part of the process and can take a little as few days or much longer depending on the size and complexity of the business. Typically some due diligence takes place after the buyer signs a confidentiality agreement. Once a buyer gets comfortable enough to make an offer, that offer usually has contingencies that

include the satisfactory completion of a more extensive due diligence process prior to an actual closing.

From a sellers perspective its important to understand the reality and importance of such due diligence. It’s not about not trusting the seller but it is about reasonable and appropriate investigation into various aspects of the business that not only will justify completing the business sale but will give the buyer the knowledge base that will help them hit the ground running after the sale and increase the chances of succeeding and optimizing business performance. Therefore, its in the sellers interest to have information organized to facility that process.

Additionally, it’s important to note that in a due diligence process surprises can and will happen. It’s normal. No business is perfect, and everyone should try to just work through them. Following are some general categories of due diligence:

Financial At the very least a buyer should review the last three full years profit and loss statements, year end balance sheets and tax returns. A review of the current year results on a recent year to date basis is also prudent. Things to look for and develop an understanding of include: fixed and variable expenses, unusual or non recurring income and expense items and which items are discretionary. On the balance sheet developing an understanding of the age of the accounts receivables and accounts payable helps to understand the cash flow cycle. Its also important to understand the composition of inventory in order to ascertain the age and marketability of the inventory and identify obsolete inventory.

Physical Assets A buyer should review the list of all furniture, fixtures, equipment and vehicles in order to get a sense of their age and condition. This helps the buyer in

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Business Section • Summer 2017 • Kentucky understanding the potential capital expenditure cycle of the business. Its also important to get a list of all equipment leases.

Real estate Buyer should review information on owned and leased real estate including zoning, use permits, etc.

Human Resources For many businesses the human resource component is a critical part of the functioning of a business and its inherent value. Therefore gaining an understanding of the employees and especially key employees is critical.

Further review items could (depending on the business) include employee agreements (non compete, consulting, etc.), employee benefit structure, workers compensation claim history, and the employee handbook.

Intellectual Property This is an area that can be very simple or very complex. Items to review and gain an understanding of include trade names, trademarks, copyrights, trade secrets (recipes, formulas, “know how”), patents and patent applications, and licenses/assignments to or from the business. It is also important to know all social media sites the business controls or is tied into.

If the business conducts or outsources research and development it may be important to understand the status of that activity especially if it impacts the new product development pipeline .

Permits and licenses The buyer should review the list of governmental licenses or permits. A good example of this would be liquor licenses and the transfer process since that can vary greatly by locality. If the business is in health care then Medicare and other licenses are critical.

Contracts Basically this part of the process is to understand all contracts to which the business is a party. This may be a simple list or can be extensive. One category is reviewing contracts used in the ordinary course of business such purchase orders, quote forms, and invoicing. Another area is supply, distribution, marketing, confidentiality and non-disclosure agreements.

Litigation Is there any active, pending or threatened litigation? Are there any unsatisfied judgements?

Taxes Is the company current with all sales tax, employment tax, excise taxes, etc.?

Additionally are they current with federal, state and local taxes? While most small businesses are asset sale (vs. a stock sale) it’s still important to understand the status of these items.

Organizational Stuff The extent of this may depend on whether the transaction is contemplated as an asset sale or stock sale. However, checklist items may include a Certificate of Good Standing from the Secretary of State where the business is located, a list of states or countries where the company is authorized to do business, and a list of the Company’s assumed names and the attendant registrations.

Public Relations, etc.

It is also prudent to do an internet search to look for articles and press releases regarding the company in the last three years.

Regulatory Environment For certain businesses it may be important to understand the regulatory environment of the industry the business operates in. An example of this is the health care industry and if legislation will impact how business is conducted and if it impacts the cost structure or other aspects of the business model. These impacts can significant (both positive and negative).

The aforementioned categories are not an all inclusive list but should serve as a useful guideline. The checklist will be different for each business. It’s also important for both sides of the transaction to understand that this is a necessary part of the business sale process.

“At the very least a buyer should review the last three full years profit and loss statements, year end balance sheets and tax returns. ” – Mark Sievers We are on a mission to raise money to fight cancer...

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We have four physicians and eight University of Kentucky medical students who have accepted the challenge: 200 mile relay race on Oct. 13-14, 2017. Our goal is to raise $6,000 for the American Cancer Society.

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Customer Information One area of potential importance is the level of customer concentration. For example, if a material amount of the company’s business (say greater than 50%) is with just four or five customers then it’s important to understand those and that business relationship. A review of any available market research regarding current customers or the targeted customer base may be important.

Environmental Issues The importance of this can range from minimal to huge depending on the type of business. The key review items include environmental licenses, permits, list of any hazardous substances or materials used in the company operations, and company files regarding the EPA and state and federal regulatory agencies.

Insurance Review of the company’s general liability, product liability, real and personal property, workers compensation, errors and omissions, key man and other insurance polices. Also its prudent to review the trailing three years claim history.

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BY TAKING CARE OF YOURSELF The Physician Wellness Program (PWP) was designed as a safe harbor for physicians to address normal life difficulties in a confidential and professional environment.

WHY WAS THIS PROGRAM CREATED? Being a physician isn’t easy. Difficulties with the current health care delivery system, maintaining a healthy work/ life/family balance, and dealing with the normal stresses of everyday life can take their toll on physicians.

We serve not only as treating physicians, but many times as counselors to our patients who turn to us for guidance.

Who do we turn to when we need to talk through an issue or get some coaching for how to handle stress in our life?

Too often the answer is “no one,” and that is regrettable because it is imperative that we be as healthy as possible in our role as health care providers.

We deserve to function at our best in all areas of our life.

By addressing areas of difficulty, we can decrease our stress levels and increase our levels of resilience.

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Seven licensed psychologists make up the Woodland Group and have been vetted by LMS. Steven Smith, Ph.D. and Sandra Hough, Ph.D. are our program coordinators and will serve as points of contact to access PWP. The Woodland Group will maintain a confidential file for each physician, but no insurance will be billed and LMS will not be given any information about those who utilize the program. As such, this program is completely confidential which is crucial to its success. LMS will pay The Woodland Group a monthly bill based on the number of sessions provided. The Woodland Group will verify LMS membership from the physician finder on the LMS webpage.

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Lexington Medical Society Foundation Golf Tournament Presented by BB&T

Wednesday, August 23, 2017 Houston Oaks Golf Course 12:30 Registration / Lunch 1:30 Play Begins

All proceeds to benefit the Lexington Medical Society Foundation.

Each Year the LMS Foundation distributes grants to over a dozen local, medical-related non-profit organizations including Surgery On Sunday, Baby Health Service, Camp Horsin’ Around, God’s Pantry Food Bank, Radio Eye, Ronald McDonald House Charities of the Bluegrass, Bluegrass Ovarian Cancer Support, and Faith Pharmacy.

2017 LMS Foundation Golf Committee:

For more information and to register, go to Lexingtondoctors.org

John Collins, MD, Chair Patrick Cashman, SIS; Wendy Cropper, MD; W. Lisle Dalton, MD; Gil Dunn, MD Update; Kenneth “Tad” Hughes, MD; John Maher; Susan Potter, BB&T; David Smyth, Family Financial Partners; Jon Voss, MD