Learn How To Create A Budget For Your Medical Practice

In medicine, the mention of the word profit is often viewed or interpreted as a dirty word. It is as if the word does not belong in the lexicon when health care is addressed.
 Broke doctor
I argue (in the context of the private medical practice setting) that profitability is a medical practice’s responsibility for one simple reason. If the medical practice (also known as a business) doesn’t deliver profits, health care providers are unable to provide for those in need.

Why Profits?

Profits pay for infrastructure, technology, education and human resources, all of which translate to superior pediatric care when employed correctly.
Another way I like to put it is by saying,

 

…a broke doctor does do anybody any good.

 

Calling vs Profits

Indeed, our medical businesses differ from other companies in that we care for children. And the notion of withholding medical services or restricting access to a sick child merely by the patient’s parents inability to pay for health care services is simply not in a pediatrician’s DNA.
However, it is important to accept the reality that without a way for a doctor or the practice’s income to outpace expenses, health care providers are unable to provide services of any kind. At least not for the long term.

Is there a solution?

How do we reconcile these two competing issues? On one hand, it is necessary for a medical practice to deliver profits if it wants to remain sustainable. On the other, we have an intrinsic motivation to put the patient’s needs first.
I am glad you asked.
These two dichotomies can co-exist – and even flourish – alongside each other. There is indeed numerous tools and principles rooted in business that can help medical practices manage what otherwise appears to be opposing forces.

A Resource You Don’t Want to Miss

Today, I want to tell you about a resource I’ve been working on to help your office obtain financial success, while simultaneously providing unsurpassed pediatric care to your patients.

To help you succeed in your financial success, I’ve written a comprehensive eBook on budgeting that walks you through the process of creating a budget for your medical practice. The materials also cover basic principles necessary to put the exercise into perspective.

Budgeting is a major component of financial success. Moreover, financial success is essential to the continuity of care.

To read more about this offering, click on the image below.

Medical Practice Budgeting
Click on the image

I do hope that you buy the book, but more important, that you find the eBook helpful, useful and valuable.

Extra, Extra – Now Offering Coaching Services

Screen Shot 2015-02-03 at 7.56.46 PMPeople always ask me if I do practice management consulting.There was a time when I did. But for the past two or so years, I’ve responded by saying no. I enjoy consulting and love to do it, but I had to stop because of the time commitment.

Recently, I was talking with a loyal reader of PediatricInc about this very topic and she suggested I do remote coaching.

My friend, who owns her practice, explained that she doesn’t necessarily need a comprehensive on-site consult. “I just want to ask a question about my practice or run things by someone familiar with practice management,” she said.

She went on to say, “…you know doctors don’t get training on business, management, marketing, collections…. having somebody to reach out to that has the business and practice management training would be valuable.”

“Like a practice management coach?” I asked. And she said, “ yeah, that is a good way to put it.”

We talked a little while longer. By the time we finished up, my loyal reader and friend had convinced me.

Today I’m announcing a new service on PediatricInc called PMB Coaching for those pediatricians and/or managers that want my perspective on practice management, discuss in detail a blog post, run something by me or provide another set of eyes.

Interested in learning about the PMB Coaching?

Click on this link.

 

Time Management Lesson That Has Helped Me Increase My Productivity

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Last year, I put myself at a crossroad. I’m sure you’ve been at the same crossroads before. It is where things to do, the things I want to do, and things I had to do intersected with this little nuance we all agreed to call time (or lack thereof).

Like many, I would find ways to be more efficient and find ways to get better at time management. But this strategy was not working out. I was still overworked and felt unproductive as if I was in a hamster wheel. I felt the need to approach my crossroads differently.

I decided to approach my dilemma by exploring and thinking about how successful people, whether they were business leaders, athletes or artist, dealt with  time management.

I discovered that people that are experts at a craft, writing, a sport, or an instrument, for example, all had enough time to do what they do. If it weren’t true, they would have not reached their level of mastery.

I realized that my problem wasn’t a time management problem or using my time more efficiently, but rather my problem was a task management prioritization issue.

The people that have time to do the things they need or want to do was not as a result of applying Steven Covey’s time management methods better than me, but rather because they are jealous of their time and only what is really important to them gets the time. Everything else, has to wait.

Which led me to conclude that:

The thing that distinguishes me from them is not better time management skills, but rather they are better determining the order of dealing with task according to their relative importance.

What did I do with this insight? How did I apply this to be a better practice manager of a small business? Glad you asked.

I sat down and I wrote all the things I did. This included everything from projects I was working inside and outside the practice, like speaking engagements, consulting and the blog. I then added all the things I wanted to do, but couldn’t find the time to do them. This included things like working out to finding time to meet with people that are smarter than me.

Once I looked at the list, it was apparent why I wasn’t being effective. It was too long. Nobody, no matter how good or disciplined they are, could manage a list that long and still be effective.

What did I do next? I prioritized all the things on the list. But before doing that, I took time to determine what was important (not urgent) to me/us ( us = partner ). In order to determine the important over the urgent, you need to have clarity with what it is you are trying to accomplish, exactly. Like, you know… have goals.

Once that was figured out,  I drew a line after number three on my list. Top three were now my only areas of focus.

I make it sound easy of course. But cutting down the list to three main areas of focus wasn’t easy. There were  a bunch of things I really wanted to do that fell below the line I drew.

Moreover, the focus on the three couldn’t happen over night. I was already committed to several projects that weren’t on the list, but I still had to deliver on.

But with a clear focus on what I needed to do, I began to get a better handle on how to protect my time and put more effort into carving out time for those things that only enhanced, improved or were in pursuit of the three main things.

What does have to do with practice management?

Simply put, nobody drifts into productivity. Nobody “happens” to find time to exercise, garden  or write a book. Nobody just happens to get better at something. In order to be better, you have to be intentional. And being intentional with our time, instead of letting  all of our “things” dictate our time, is not a scalable solution. At best you’ll crank the hamster wheel a little faster.

If you want to make progress at something, you have to direct your focus at that something. Thus, in order for me to become the best practice manager I could be and lead my team well (in addition to being a better husband and father), I needed to stop doing more – which was hindering my progress altogether – and start saying no.

Perhaps some of you  are thinking this is absolutely unreasonable and if I knew everything that is going on in your life, I would agree with you that you couldn’t keep a list of only three things to focus on.

I’m going to disagree. I too have a super hectic life. But it can be done.

Read the biography of any great leader in history, whether a politician, CEO, or successful entrepreneur, and you’ll begin to see that despite their crazy busy schedule and work demands, they were laser focused with a few priorities.

Keep this in mind… the top three things are areas of focus… not necessarily specific task. What I mean is that one will still have a lot to do. But the difference for me is that each task, job, interview, meeting, outreach is done with a purpose.

And remember, we make time for our priorities. But if we don’t have priorities, areas of improvement or specific goals of what to do with our finite time, well, then, it is no wonder we don’t have time.

So my challenge for you today is this; start looking at your time management issue as a task management issue and shift your mind to think in terms of areas of focus and let that determine how you should spend your time. And I bet that once you do that, you’ll have a bunch of time on your hands to do the things that are important.

Until next time.

10 Time Management Axioms For The Dedicated Medical Practice Manager

At the end of last year I went to a leadership conference. Among the session, there was one on time management. This, of course is an area that many of us struggle with.

Show of hands, how many of you have uttered these words? there just isn’t enough time in the day.

That is what I thought!

I’ve had to think a lot about time management in recent years due to life circumstances. Life has gotten more hectic with a growing practice, and growing kids. So I was eager to hear what Craig Groeschel had to say.

Craig is the head of a large organization. He is behind one of the most downloaded smartphone app of all time; he writes books, is a well known speaker, and as if that wasn’t enough, he’s a father to 6 children.

I think he may have a thing or two to say about how to manage time.

So what did Craig say? Well, lucky for you, I wrote notes. But instead of writing them here on the blog, I created a pretty slide show that highlights Craig’s main lessons from his time management session.

Of course, it isn’t going to be the same without Craig’s insight, context, and gifted speaking ability. But at least you will get enough to incite a few thoughts and tailor your own approach towards time management.

Hope you enjoy the axioms and the slide show. (By the way, I’m aware of the typo on the last slide. I’ll fix it soon.)

If you are interested in learning about the leadership conference I referenced, check out this link to learn more about it.

How to Deal with Unreasonable Patients in Your Medical Practice

Angry patients, customer service, medical practiceA while back, I was working the front desk when a dad of one of our patients came up to me and said he didn’t want to sign the credit card on file authorization. I politely insisted he needed to fill out the auth form. He cut me off with loud: “WHY? Who came up with this stupid idea?”

Awkwardly I uttered, “Ummm, me.”

Now, both of us felt awkward. Silence…

So the parent broke the silence and in a less aggressive manner he asked why we were doing this. He asked, “…don’t you get paid by my insurance company?”

I started explaining how insurance worked. I happened to have a collection report on my desk. I showed him the bottom sum. It displayed the number that we had written off due to bad debt for the previous months before the CC policy went into place.

His draw dropped. He said “I had no idea..” he then said, “…how can you run a business when you don’t get paid right away?

“Now you know why this policy is so important to our office,” I said.

He gladly gave me his card.

In my experience, very few people will have a problem with your practice policies, whether it is collecting a charge for forms or instituting a credit card on file program. The ones that have an issue, will have less or no issue once you explain to them why you are doing it.

Let’s call these two group the reasonable parents. 

There will still be a group – a very, very small percentage of those that will continue to have a problem despite your best effort to explain your reasons.

How about if we call that group unreasonable parents? 

For the reasonable ones, continue doing what you do best. In fact, bend over backwards for this group.

For the others, the unreasonable ones, let those skeptics go free. Let them pout, yell, scream,  and complain. But don’t be afraid of them. And what ever you do, don’t let them dictate what you know is the right thing to do. Also, and equally important, don’t let those bad apples influence how you will continue treating the reasonable ones. You don’t need the unreasonable ones . Let them go.

#14 Dr. Natasha Burgert Joins Us To Talk About Social Media [Pediatric Practice Management Awesome-Cast]

Wow, we scored big this week and somehow convinced Natasha Burgert – queen of pediatric social media – to speak to us. Her real-life stories are great.

Don’t believe us? Watch/listen and see her Twitter effort or check out her blog.

A special shout out to an awesome vaccine-related charity that Dr. Burgert supports: Shot @ Life!

As always, you can get the AwesomeCast in different formats:

iTunes

Google+ PPMM Community Page

Pediatric Practice Management MediaCast

How to Prepare For ICD-10 The Right Way

Water tap dripping dollar bills, Water waste conceptIf you’ve done any reading about ICD-10, you know that this transition will be a monumental task. Fundamentally speaking, ICD-10 is a paradigm shift. It is designed to completely transform medical documentation. And since documentation is a lot of what doctors do, inevitably these changes will impact our day-to-day practice.

In a recent AMA publication, the authors concluded that the two biggest challenges with implementing ICD-10 will be having the necessary system upgrades completed and staff training.

Preparing and planning ahead on how to manage these two main areas of concerns will greatly decide how smoothly the practice will transition to coding in an ICD-10 world.

However, addressing system upgrades and staff training are mainly operation and implementation issues. There is one important piece of the preparations that is not getting enough mention. And that is, the potential cash flow issues that can occur during this transition.

In other words, will your practice have enough cash reserve to sustain 2, 3 or 6 months without any income?

I can’t speak for other specialties, but in pediatrics, when we’ve gone through CPT updates and revisions, health insurance company can take weeks, sometimes months before they update their systems despite being informed of the new codes months in advance. With ICD-10 we are talking about a complete overhaul of our entire CPT system.

Can we be assured that health insurance company will have all these codes ready in their system on day one? If we can be, then I guess there is nothing to worry about. But if history is any indication, medical practices can expect going months without collecting from insurance companies.

In our practice, we generally keep cash reserve for, you know, rainy days. But in my forecast, I’ve never projected to run the office with zero income. I’ve always put in my forecast that some revenue would trickle in, thus lessening the burden of the so call rainy day.

Lines of credit can certainly help. But if your office’s line of credit is anything like mine, I doubt it could sustain the practice’s operation for 6-months.

Recently, I spoke to Dr. Susan Kressly about this very topic. This is what she had to say about this potential issue:

I am proposing doing your planning far in advance so if you can stash a little cash month by month so the pain isn’t so awful when it hits. There are LOTs of pediatric practices that live hand to mouth. If their claims get held up for a month, they can’t meet payroll. I’m constantly amazed by that.

She also cautious us to be good boy scouts and girl scout and start preparing sooner rather than later.

There is no way you can effectively plan for this 3 months before it happens. You don’t want to take out a last minute line of credit and pay interest if you don’t have to. Many of us are seeing a LOT of patients right now. I am proposing you consider lean times in this current time of seemingly plenty.
In her office, Dr. Kressly has already started taking measures. Here is what her practice is doing starting this year.

In her office, Dr. Kressly has already started taking measures. Here is what her practice is doing starting this year.

We already had a conversation in our office about our “disaster” plan (for the potential cash flow disaster of 2014). We talked about how much it would really cost us to run the office for 1, 2 and 3 months if everything got ground to a hault. We made a plan on when to start saving, what makes sense for our corporate structure.

As part of their planning process, Dr. Kressly and her partners decided to make big purchases in 2013 instead of waiting until 2014.

We decided to upgrade our infrastructure this year 2013 (new server, computers, some other upgrades/capital expenses that we new we had to do in the next few years.) Get those done this year, so when 2014 hits we can start enacting our conservative cash flow/banking plan. If it never happens, then WOO HOO! My bonus will be awesome! And if it does, the bills all still get paid and eventually we will get paid for the work done, just making sure that the business is still standing.

After speaking with Dr. Kressly a few things became clear:

  1. There is a greater sense of urgency to start putting this money away (a few months is not enough to gather all the money one will need).
  2. I need to be realistic about how much our practice will need (that is, a little bit of cash on hand probably is not going to cut it).
  3. I need to consider and prepare for zero cash to come in during that transition; which I’ve never considered really.

What are your thoughts? You think we are being like Chicken Little or does this argument resonate with your the way it did with me. You know, this for all we know, this may be our Y2K. But being judicious with cash has never steered anybody in the wrong direction.

Easy, Easy Way to Implement A Survey Tool in Your Medical Practice

I’ve been thinking about implementing a more streamlined survey tool. But this is one of those things that you know is important, but not necessarily a priority. That is, nothing

surveyis going to fall apart if you don’t send a survey to a patient.

Today, this comment (see below) came across on my screen from the SOAPM listserve that caught my eye.

I emailed Dr. Adams and asked him if I could post this on PediatricInc. He agreed. Dr. Adams discovered a really easy way to implement this using Google Drive.

Dr. Adams writes:

There are many free survey tools out there now, like SurveyMonkey and LimeSurvey.  SurveyMonkey even has the CAHPS survey preconfigured. However I found SurveyMonkey to have some limitations.

Google Drive has a very easy to use survey tool and is implemented at our checkout desk.

It is self explanatory, and requires no prompting or input from the receptionist. It displays a short questionnaire, and when the patient submits it, another comes up for the next patient. It is all automatic.

Google Drive constantly and painlessly tabulates results, placing them in charts that are easy to access anytime, with no knowledge of Excel.

As a bonus, NCQA is requiring surveys now. If you use questions from the CAHPS, as I have have done, then this requirement is met, automatically.

——-

Love it when people find practical ways to do taks that are sometimes a little boring and time consuming.

What does your practice use to survey patients and how do you tabulate the results?

Leaving a Hospital Job to Start a Solo Practice

Dr. Lois Freisleben-Cook is a pediatrician that started her practice after completing a two year contract with the local hospital.

These days, you don’t hear about too many docs leaving hospital jobs to open up solo practices, so I wanted to learn amount what many consider to be a rare, dying breed of doctors.

I reached out to Dr. Freisleben-Cook and asked her if I could ask some questions regarding her experience as a solo rural doc. She was gracious enough to allow me to post her responses.

The post is a little long. Certainly longer than usual for PediatriInc; but Dr. Freisleben-Cook provided SO much information that I couldn’t pass it up.

Enjoy!

———–

Tell me about your experience making the transition from clinic practice at a local hospital to a solo doc.

I left a clinic practice at a local hospital after my two year contract was up and over 2500 patients came with me.  By the fourth year I was up to 4000 and now over 6500.  The population of this town is expected to triple by the end of this year and do it again in another year. I have been the solo pediatrician here for the past twelve years with the nearest pediatric care over 120 miles away to the east and over 500 miles to the west and south.  Canada is to the north and there is nothing between us and Canada.

Holy Cow. That is a lot of patients

I can’t stop taking new patients because the rest of the community docs are also full.  I am especially obligated to take all the CSHCN as they have no one else to see for over 120 miles.

Before you started, what resources did you use to gather information about starting a practice?

Before starting I used what I had learned over the years managing developmental clinics for the Department of Defense. I had no experience with the financioal side of things and foolishly thought I could learn as I went on. The clinic had a huge cash buffer provided by my husband and myself so we were able to make a lot of mistakes and survive financially.

Now I would suggest the AAP practice management resources. It is excellent for setting up the logistics of a new practice.  I did not use them ‘till I was five years into practice thinking I already knew it all.  Boy was I wrong.

Life would have been a lot simpler if I had used those wheels instead of trying to invent my own.   Another source of good and practical advice offered with no strings attached is the PCC site.

There is a lot of information out there and much of it can be confusing and wrong.  You can’t go wrong if you start out with just these two sources.

Since there is so much information out there, where should one begin in terms of  preparation?

Learn all you can about coding and documentation as that drives your revenue stream. The biggest mistake most new docs  make is to under code and undervalue their services. Although it was forced on me, I took a coding class in California that more than paid for itself.

Anything else you would add to a doc that is preparing to open up their own office?

Remember everything you do that requires thought and knowledge is valuable.  Even things that are obvious to you are important to patients and are valid billable services.  If your see a newborn and spend time counseling about breastfeeding to solve a feeding concern document it and charge for the time.

I have learned that there are ways to be compensated for my time even if providing an “uncovered service”.

Some of our insurers, for example, do not cover asthma education.  I simply document the elements we discussed and code for time spent in the chart.

As Herschel will say, do not give away the talents and information you have earned.  Remember you are valuable and do not let insurance company or anyone else say otherwise.

Editorial Note: Dr. Herschel Lessin is a regular contribution to Survivor Pediatrics and a very passionate member of the pediatric community. Dr. Lessin has posted on PediatricInc before

What else?

Learn the Medical Home standards and start off with the structure you will need to meet them using the ample free on and off site support available too you from the AAP and a number of other medical home agencies.

Speaking of uncovered services, many docs find out very quickly that what you learn in a coding class in terms of appropriate ways of billing, doesn’t always fall in alignment with how insurance companies pay for services. What do you think about that?

Follow CPT guidelines and bill even if the insurance company says it will not cover.  For example an insco may say it does not cover after hours codes. Document and bill them anyway and track the refusal to pay so you can later take it higher.

If something is in the CPT as a billable service, don’t leave it out because they never pay.  That is a reason to keep it in.

Make sure your payment data is in a format that is conducive to searching who pays for what and what refusal codes they use and what services they illegally bundle.  In a few years you will want to analyze and act on that data.  Encourage families to update their insurance policies to take advantage of the ACA. If a policy is grandfathered, have them consider making a small change that will put it into the newer eligible for ACA category.

Those are great tips on the billing side, what about staying up to date on the clinical side?

Learn and keep up with Bright Futures and use it as the model for preventive care.  Assign one of your staff to use that to design all well child visits and documentation and remember everything in the Bright Futures preventive model is covered under the ACA; so bill for the hearing and vision screens, developmental screens, the depression screens as separate and not bundled services.  Record the refusals to cover and the bundling.

What about billing staff, what should you instruct them to do as you get started?

Make sure your billing person gets current literature i.e. AAP coding bulletin etc and attends continuing education activities. The return will more than pay for the classes.

Make sure your clinical staff have opportunities to learn new skills and advance in their own careers.  They will eventually grow out of their jobs but will be sure you have what you need in new hires.

Managing employees is no easy task. Any words of wisdom? 

Value everyone who works for you and show that your value them.  Don’t set up a hierarchy but instead use the team model including the 180 degree evaluation process.

You seem to have a lot of great ideas. Can you think of one (maybe two) that isn’t as common to the rest of us that would help our practices?

Recruit a parent to be a consultant to the practice, reviewing how you do things and giving input on what would work better from the parent perspective. Include that person in staff meetings .

OH  YES  never forget to have regular staff meetings.  That was one of my biggest mistakes.  Ask the parent consultant to interview families leaving the practice. That will be more forthcoming with their reasons with the “parent consultant” than with a member of your staff.

Do satisfaction surveys early on and often to identify ways to better meet the needs if families. You will get enormous PR capital by taking the information in these surveys, sharing it with families, and having them help you brainstorm improvements.

Many pediatricians have a tendency to want to do everything. What do you say to those docs?

Do not be penny wise and pound foolish.  If you are spending time doing something you can train an employee to do then do it and give it up.  If you can hire someone to do it for ten dollars an hour that frees you up to make a lot more than her salary.

Can you give me an example?

Hiring a scribe is a really good investment.  You will be a better doc if you delegate things you do not need to be doing yourself. Remember to follow up on tasks you delegate.

You need time to think, have a life and sleep. Your family needs you to spend time with them when you are not exhausted.  Just like a marathon, you can start up with a slow pace and little work and build up to more and more as you find yourself able too handle the flow.

On the SOAPM listserve you’ve shared some pretty scary circumstances that have added stress to your private practice endeavor. I’m not going to get into those challenges, but would you speak a little bit about why you do what you do despite those challenges?

I love coming to work every day.  I love being able to employ and train and offer the services of care coordinators, parent advocates, clinical and administrative support to local activities such as Head Start, and practicing the way I want to.

I love being able to write off a bill now and then when someone really is in a bad spot financially. I love being able to handle 99 percent of the care from my office.

I love the fact that in twelve years we have NEVER had a bad outcome, not one of my patients has died and the only two deaths we have experienced were inevitable when we first saw the children (a drowning and an end stage neuroblastoma) .

I love that children and their parents feel at home in our clinic and readily bring their concerns and their family members, friends, neighbors to us.

More recently I have had the unimaginable pleasure of hearing parents stay they feel well cared for for the first time and are grateful they came here because their children with special needs are doing so much better than they did in the “big cities” they came from.

I guess what I am trying to say is that in spite of the horrendous medical climate and incessant bullying I experience, I would not go back and change my decision to stay here.  While I could have easily returned to Westwood and had a nice and stressless practice there, I would not have the wonderful sense of purpose and service I find fulfills me.

If you could go back in a time machine (like Marty McFly), what would older Lois say to younger Lois as younger Lois was ready to embark on this long scary journey of opening up a practice?

BE HUMBLE

BE HUMBLE

BE HUMBLE

Even as you value your services, do not overvalue yourself as a person as we are all in this world together and you could never survive without your cleaning lady.

Learn how to make the rest of the world disappear and be infinitely present to the moment when in a room with a family.  They will feel your attention and the time spent with you will feel like it is long enough even if it is only five minutes. Greet the child first when you enter a room and briefly interact with the child before addressing the parent.

Anything else you would say?

Ask questions.  There is no such thing as a stupid question and everyone her and at the AAP loves to answer questions and give advice. Start with SOAPM first.

I Don’t Know How Else To Put This, But My Ebook Is Kind of a Big Deal

If you are a regular reader of this blog, you probably know about my e-book, 101 Ways to Transform Your Practice.

If you haven’t picked it up (it is free by the way) I wanted to give you a little nudge to do so. Not everything in the ebook is going to work in your practice. But at the very least, I think the ebook will spark ideas that you would have not had otherwise.

If you are still not convinced, then let me share this little something that I got from a reader of PediatricInc recently that got the ebook.

Hi Brandon

Thank you soooo very much!

I  shared your book  with my staff, as the template for our practice meeting today, as we are forging ahead to re- engineer our practice, and I must say , afterwards our way forward became crystal clear.

In one day, we have created a Facebook page, developed an email template to thank new patients for visiting our medical home, and created three mini videos using myself and my nurse to welcome patients to Frontier Kids Care!

We have a new excitement about implementing our changes.

We are also looking at recalls, and the financial status of the practice.

We looked at our mission and are working on the charter.

Our improved website is due to be released next week, but we are going to be wasting no time in putting our new status on Facebook etc now.

I invite you to preview our before and after website at frontierkidscare.com

In Trinidad, obviously our needs are much simpler, we definitely do not have practice managers, but my solo practice has a nurse and a receptionist, and we cross train.

I definitely am challenged on  the business side, so I realize I need a business manager in some form or fashion.

So again thanks, and I wonder if your book has been published so I can purchase one.

Your practice is blessed to have you!

Take good care.

Rose Marie

I don’t know how else to put this, but my ebook is kind of a big deal. Pick it up for free by going here.