FROM THE CHAIRMAN

by Michael Gregory, M.D., Chairman

Earning a Living

September 18, 2008

“Michael, everyday I go to work I know I have to earn more for the company than I take in salary. Its called earning a living.” Speed Gregory (my grandfather)

I don’t know if you have paid attention to the financial crisis affecting Wall Street and the banking sector. You will be shocked to learn that nowhere in the articles that I have read, or news reports I have watched, have I seen one ounce of sympathy going out to those who brought us this crisis. For the most part, America doesn’t feel sorry for rich investment bankers, hockey players or airline pilots who get sweetheart deals and suddenly go bust.

Whether you like it or not, I fear that “rich doctors” will soon be added to that list. Before you accuse me of loosing my mind, hear me out.

When I started in hospitalist medicine 12 years ago, I was beating doctors off with a stick. Our deal of $120,000 to work 21 days a month, with no home call, seemed to many physicians who interviewed “impossible to sustain.” I was constantly faced with “How can you afford to do this?” and “I work twice that much and don’t earn $120,000 in my private practice. How is this possible?”

The shoe is certainly on the other foot now. Hospitalists are the fastest growing specialty in the history of medicine. Jobs working two weeks a month with salaries of $180,000 per year are now commonplace. From an investment perspective, the salary per patient seen for internal medicine has out performed the S&P 500 by more than 4 to 1 over the last 10 years. We are hospitalists, so this is great for us, right? To a point...

In any relationship, there must be value creation. You must bring more value to that relationship than you take away. If there are two people in a relationship who both bring more than they take away, that is called synergy, where 1 plus 1 can equal 3. In other words, the whole is greater than the sum of its parts.

If we are to succeed as hospitalist’s we must bring more value than we ask for in payment in return. Frankly, this is very doable. However, it is not easy. It means defining how we create value, focusing on those actions, and quantifying the results of those actions. At Apogee we have distilled this into the Hospitalist Promise. The Apogee Hospitalist Report Card is the physical embodiment of this promise. We can try all we want, but in the end, it is not the team that tries the hardest that wins the World Series. It is the team that scores the most runs. Your Report Card is your data. It is your results as a hospitalist. It doesn’t measure how hard you tried or what your intentions were, only what you have actually done... Results, pure and simple.

We are talking about value and measuring that value so that it can be consistently created. If we, or anyone, want to sustain increasing salaries and better work schedules, we MUST continually achieve (notice I said “achieve” not “try to achieve”) meaningful results that we can put up on the board so when the score is added up....we win. Basically, Wall Street has been playing a shell game and sooner or later the chips get counted. The chip counting has already begun for hospitalists. Either we play our cards well and deliver real results or we could find ourselves joining the ranks of those other unemployed rich people that nobody feels sorry for.

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