July 16, 2021
Which Equation Defines Your Practice?
In Portland, Oregon, The Gastroenterology South division of The Oregon Clinic was seeking financing for its new project and received a pretty decent proposal from its previous lender. Yet, that same lender subsequently threw out its original pricing in favor of much lower rates when a new RFP hit its desk.
In Olympia, Washington, Olympia Orthopaedic Associates negotiated with its incumbent bank to improve the terms of its real estate financing without any discernible movement. When the group advised the incumbent bank of its decision to move to another bank, the rate suddenly got a lot lower (but a bit too late).
In Houma, Louisiana, Cardiovascular Institute of the South (CIS) tried unsuccessfully to negotiate with its incumbent lender. The lender figured no other Louisiana bank could knock them off their throne. That lender did not expect two other banks from outside the state showing CIS some real love.
In Boulder, Colorado, BoulderCentre for Orthopedics had been given its last and best offer to finance its real estate by the lender that had handled the practice banking for the last six years. Two months later, that same bank dropped its pricing drastically after not immediately winning the RFP.
And, near Salt Lake City, Utah, the Chief Medical Officer of the Tanner Clinic was assured by the President of its incumbent bank that Tanner would be given the best pricing, only to learn that the bank’s VERY best pricing was offered only after it didn’t win the bidding.
What happened in these cases is typical of what CMAC Partners sees across the country and is fueled by one single cause … COMPETITION.
Had any one of these practices settled for what their friendly bankers had offered as favored-client pricing, they would be seeing a lot less on the bottom line. Every physician partner would have less money in his or her pockets.
Historically, there has been a reluctance to change banking relationships. While everything from insurance coverage to equipment is bid out, banks have enjoyed a special immunity from close scrutiny. Well, things are changing. Practices are growing businesses, and the best outcomes demand the best business practices. As these examples bear out, COMPETITION is at the heart of those optimal economic outcomes.
And, while COMPETITION has always been a great motivator in and of itself, the recent advances in technology have produced even greater improvements for those ready to move outside of their comfort zones.
Olympia Orthopaedic Associates reports that it has seen better service from its new Atlanta-based bank than it saw from the bank having a branch five minutes away. Cardiovascular Institute of the South has been presented with operational advancements from non-Louisiana competitors that it is excited to institute.