By the time you read this article, the infamous investor Bernard Madoff will have become a household name. Madoff's malevolent Ponzi scheme to defraud $50 billion from some rather sophisticated and unsuspecting investors are the material legendary criminal cases are made of. As always, the TV "talking heads" are asking how this could have happened, why no one saw it coming, where the oversight agencies were and when this kind of scandalous activity will cease.
As the scandal unfolds, one phrase will come up over and over again: "due diligence." The phrase conjures up the image of a corporate board room in the midst of high-powered negotiations, where big decisions are made and the usual presumption of competence and skill in investigating a proposal is a given.
The legal definition of due diligence refers to precautions that are supposed to be taken by a person or company in some context. If they do not take those precautions and bad results come of their negligence, they can be held criminally liable. The need to execute due diligence is something every doctor of chiropractic should be aware of in their everyday personal and professional life. From those final days of being a student to the beginning days of establishing a practice to the growth phase and ultimately through retirement years, careful and methodical exercise of due diligence is a must.
Paying Attention to the Fine Print
Here's a classic example of throwing due diligence out the window. I have had the occasion to read several dozen "employment contracts" provided to students, who were asked by established doctors to sign an associate employment agreement. The terms of the agreements were so onerous, one-sided and punitive that I often wonder if the established doctor ever read them, much less fully understood the consequences of the document(s) they were asking these young doctors to sign.
I truly hope that is the case, but let's focus on the due diligence (or lack thereof) by the new doctor, and what they should always do to prevent untold harm. Some of these aforementioned contracts prevent the doctor from opening a practice within (X) miles of the established office or any satellite offices. The bonus structure or salary is so restricted that the young DC could not make a decent living working 100 hours a week. The litany of specific duties could run for pages.
Yet despite the language in the proposed one-sided contract, the young DC is so hungry for a position (knowing they must pay their bills soon) that they will sign anything. Significant harm to the doctor's personal life and psyche could be avoided if they would only review, consult and remove emotion from the discussion before the final decision is made. The trauma is experienced after the fact, when it is too late to do anything about it, and most often the young doctor does not have the financial wherewithal to legally fight the issue even if they wanted to.
What about those "Increase Your Practice!" schemes that are touted in most of the journals and promise you a reception room overflowing with patients and a waiting time of months before you can take a new patient, if you only promise to do ___ (you fill in the blank). After you sign up, it is too late to calculate the up-front cost and the monthly fee or percentage of gross income increase you are responsible for. Read the fine print and remember the old cliche: If it is too good to be true, it probably isn't true.
Then there are the DC/MD practice models, which have been viewed with great suspicion over the years, particularly if they suggest in their marketing that you will reap "increased dollars vs. increased patient care," "billing for services you cannot do as a DC" or a host of other activities that down deep, most of us know are not legal, ethical or moral. Yet many doctors want the promised benefits so badly that they don't do one important thing. You got it: They fail to do due diligence - and that simple failure has caused some DCs to trade in their white coats for orange jumpsuits, not to mention the embarrassment to the doctor and their family, patients and community.
Even doing just a little due diligence when considering an equipment purchase can save you an enormous amount of hassle and headache, not to mention buyer's remorse. You might discover the equipment that interests you has not been given the government best choice award or that there is insufficient research evidence to back up claims (if claims are made). You may find that the super-duper technique you've been pitched has not been put through a legitimate research trial and that the claims about it are often nothing more than wishful thinking.
Saving Time and Money
Doing due diligence on most of the decisions we make will save time, money and considerable embarrassment. Think about asking for a satisfied and unsatisfied client list, and then call the users or former purchasers at random to get some information on your own. Look in the journals for someone selling the got-to-have "doohickey," call them, and find out why they are selling it. Ask for a list of doctors who wanted to return the product. The list goes on, but it is a place to start. In short: Do due diligence before making any purchase or service. Sometimes due diligence does not involve any major effort other than reading the fine print in the sales document. From securing loans and leases to purchasing malpractice insurance, always remember that the devil is in the details.
Have your really done your due diligence on your managed care contracts? I mean really reading the fine print and only then deciding it is a good deal. If so, great! If not, why not? What about HIPAA and other office compliance issues - are they up to date? Have you read the new rules and regulations from the Family and Medical Leave Act regarding employee hourly wages?
Then there are the due diligence issues that are often forgotten in the hustle and bustle of everyday life. For example, have you upgraded your fire and general comprehensive insurance on your home and office from the time these policies were initially purchased? Have you checked your auto insurance to be certain you have proper coverage if a staff member uses your car for a work-related errand? Some of these items do not cost much (if any) money, but after the incident/accident is not the best time to find out you did not upgrade your policy. Due diligence is one of those things that applies to us at every age and stage of our personal and professional development.
Do you know what your interest rate is on your current mortgage, your bank line of credit and/or your consumer loan? Maybe with a little due diligence you'd find that in today's economic climate, you can refinance and save considerable money by doing so.
My message is really quite simple: We live in a very complex world in which time appears to be shrinking each day, there is too much to do, and too little time to do it. However, when it comes to time management, proper use of your time can and does make all the difference. It all comes down to doing due diligence.
Click here for previous articles by Louis Sportelli, DC.