A Counteroffer

At breakfast a day later, Preneur's attention was riveted by a story on page one of the paper. "Deal With Urologists Attacked," read the headline. After summarizing Stone's proposal to the hospital board, the story went on to quote Dr. Rene L. Riddle, a urologist who was not one of Stone's three partners. "Lithotripsy is an overvalued procedure, and the people who perform it are overpaid," Riddle asserted. "The hospital board should not allow itself to be dragged into another arrangement with physicians who are primarily interested in profit. The board owes it to the community to turn down this ill-advised plan." Riddle argued that physicians who own "ancillary" facilities or services have an inevitable conflict of interest. "The more procedures they order -- necessary or not --the more money they make. They ought to be thinking of their patients' welfare, not their bottom line as investors," he said.

The story reported a counter-offer by Riddle. He felt so strongly opposed to Stone's proposal, he said, that he would purchase a used lithotripter and give it to the hospital. He wasn't asking for any return on his investment. "Well," Preneur thought, "that sounds like an offer we can't refuse."

Preneur placed a call to Ed Ministrator, the hospital's CEO. "What do you think, Ed?" he asked. To Preneur's surprise, Ministrator was not enraptured by Riddle's proposal. "It's not that simple, Andy," he said. "We can't just plop a unit into the hospital. We would have to do some reconfiguring of our space, and that wouldn't be cheap. On top of that, we'd have to pay to maintain the machine. Besides, suppose Riddle buys the thing. There's no assurance that Stone won't go ahead and buy another one. Maple town just doesn't need two lithotripters. Stone is in practice with three other urologists — that's more than half of the urologists in town. Where do you think the four of them would send their patients? We'd be stuck with a machine we weren't using. Where would we get the money to keep it up?"

"I hadn't thought of that," Preneur answered.

"Well, what about Riddle's concerns about conflict of interest?" Ministrator responded. "Why don't we ask the rest of the docs what they think? Do you think that information would help the board?"

"I think that's an excellent suggestion," Preneur replied. "We could really use their input." Ministrator said he would check with other members of the board's executive committee and, if they endorsed the suggestion, he would poll Mapletown's physicians to determine their preferences for the location of the lithotripter.

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