Buy-In: A Scam or Typical Hurdle in PP?

[B-Bone]

Our group is one of those "everybody does the same number of calls and all different types of shifts and we split the money equally among partners at the end of every month" type of practices. You can buy or sell calls, shifts, vacation weeks, etc at "the standard hourly rate" which the business office transfers from one doc's check to the other's the following month (pre-tax of course).

We have a three year buy in where everybody makes a base salary. On top of the base salary, the rest of the monthly receipts are split up into shares for each group member: partners get 100% share, second and third year junior partners get a smaller percentage, and the first year junior partners get straight salary. You start getting paid immediately after you start; no waiting for A/R to accrue.

Junior partners generally all make partner (1 has not in last 40 years). Everybody takes the same number of calls. Junior partner vacation is a guaranteed number of weeks for each year of the track, while partner vacation varies each year based on staffing/coverage. We did run into a situation a few years ago where our vacation dipped below what we guaranteed the juniors, so we sucked it up and took less than them. I'm sure we could have stuck it to them, but we're not that kind of group.


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[sevoflurane]

Unfortunately, the flip side is that productivity based private practices often have a few docs who try to game the system so that their hours on the playing field are most productive. E.g., high volume ENT room with good payors vs slow as hell general surgeon with a Medicaid/no pay practice

Whatever the system, there will always be some people who try to game it. Depends what the incentive is: Money, Time, or Workload.

You can get around that by having a blended unit and also assign a certain value for certain cases so there is no cannabolism. You can also create a rotating list so that everybody gets that premium day on a fair basis.

As for aneathesiologists dodging cases... I have observed very little of this when what you are dodging is direct reimbursement. Laziness is infrequent with an eat what you kill setup.

Personally, it's good for my psyche to know exactly what I generated during a particular heavy call. At the same time when I am post call from a light night I don't mind not having the big bucks because I can use my post call day as if it was a weekend day.

Just my $.02

 

[sevoflurane]

What I'm describing isn't a true eat what you kill, but a fair and balanced permutation of that system.

 

[Mman]

Is your distribution a dividend?

yes

 

[skypilot]

How can "someone" give more than a bathroom break when covering 4:1. It makes you unavailable. Unavailable to start cases or come for emergencies in the OR or PACU. If that's how you operate, why supervise them at all?
What passes as the standard of care at many groups is fascinating.


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Il Destriero

I never supervise 4:1. Usually 2:1. The way it works where I work is that another Doc covers your rooms when you are giving a lunch break. Docs are in the rooms giving lots of lunch breaks though. I would be interested in hearing how other groups do it.

Do Docs give lunch breaks where you work? In order to have CRNA's give all the lunch breaks you would have to have a lot of CRNA's... and we do not have a lot of CRNAs. In fact many of the rooms are solo docs.

 

[aneftp]

I never supervise 4:1. Usually 2:1. The way it works where I work is that another Doc covers your rooms when you are giving a lunch break. Docs are in the rooms giving lots of lunch breaks though. I would be interested in hearing how other groups do it.

Do Docs give lunch breaks where you work? In order to have CRNA's give all the lunch breaks you would have to have a lot of CRNA's... and we do not have a lot of CRNAs. In fact many of the rooms are solo docs.

4:1 especially in busy private practice is really hard to give lunch breaks personally.

I've done it before. But the standards are very loose with "medical direction" vs medical supervision. That's where the bogus AANA health affairs reports about Crna's being as equally safe as anesthesiologist come from.

Especially with Medicare rules. Many places will just bill as supervision cause MD doesn't meet all the criteria for direction (being in the room for all critical aspects of the case).

 

[Shimmy8]

Group I recently interviewed with is a bit unique.

They sold "ownership" to private equity 10 years ago and now have no partners. 90ish anesthesiologists, cover 9-10 hospitals, base salary first 3 years that escalates then plateaus. After second year get option to buy equity in the group. The equity ownership is brand new, so I'm waiting for contract ( to see nitty gritty details of it. Group is still growing as well, everyone seemed excited about the equity opportunity. All equal call from get go, vacation once hit 3 years.

They also contribute ~30k/yr 401k, setup for 52k max.

 

[aneftp]

Group I recently interviewed with is a bit unique.

They sold "ownership" to private equity 10 years ago and now have no partners. 90ish anesthesiologists, cover 9-10 hospitals, base salary first 3 years that escalates then plateaus. After second year get option to buy equity in the group. The equity ownership is brand new, so I'm waiting for contract ( to see nitty gritty details of it. Group is still growing as well, everyone seemed excited about the equity opportunity. All equal call from get go, vacation once hit 3 years.

They also contribute ~30k/yr 401k, setup for 52k max.

It's one of those fake partnerships. Who knows how much private equity controls. Who knows how much "ownership" the former private group retains. Sure they retain 100% control to operate on a day to day basis. But who has voting power.

As far as I can guess. U may be "buying in" to a minority ownership with zero voting power. And by minoritu. I mean very very same share compared to the original owners.

As long as they are up front (which it seems they have given you full disclosure). The ball is in your court.

I've seen a couple of USAP contracts people have had me look at that contained this type of "fake partnership" language.

 

[Robotic Wis-Hipple]

It's one of those fake partnerships. Who knows how much private equity controls. Who knows how much "ownership" the former private group retains. Sure they retain 100% control to operate on a day to day basis. But who has voting power.

As far as I can guess. U may be "buying in" to a minority ownership with zero voting power. And by minoritu. I mean very very same share compared to the original owners.

As long as they are up front (which it seems they have given you full disclosure). The ball is in your court.

I've seen a couple of USAP contracts people have had me look at that contained this type of "fake partnership" language.

If you're not an owner, not getting any bonuses, etc, what exactly are you buying into? More specifically, why is your salary reduced the first 2-3 years? This makes no sense to me.

 

[Shimmy8]

It's not being "sold" as a fake ownership.

As far as my understanding, it's an investment opportunity, similar to employees who have stock options.But again, I have not seen the details and certainly won't be signing (if offered) until that is very clear.

There is a board of directors that has multiple physicians with voting power.

But again I have no illusions that I'll ever be a "partner" so to speak.

 

[aneftp]

It's not being "sold" as a fake ownership.

As far as my understanding, it's an investment opportunity, similar to employees who have stock options.But again, I have not seen the details and certainly won't be signing (if offered) until that is very clear.

There is a board of directors that has multiple physicians with voting power.

But again I have no illusions that I'll ever be a "partner" so to speak.

Better read what type investment u are getting especially in private groups that want to eventually be taken public (aka USAP wants to be taken public and it's no secret private equity Welsh Carson capital is behind it).

I believe the original partners likely own a different share of stock worth more than what you are buying into.

 

[Psai]

Group I recently interviewed with is a bit unique.

They sold "ownership" to private equity 10 years ago and now have no partners. 90ish anesthesiologists, cover 9-10 hospitals, base salary first 3 years that escalates then plateaus. After second year get option to buy equity in the group. The equity ownership is brand new, so I'm waiting for contract ( to see nitty gritty details of it. Group is still growing as well, everyone seemed excited about the equity opportunity. All equal call from get go, vacation once hit 3 years.

They also contribute ~30k/yr 401k, setup for 52k max.

You're getting boned. Not sure why you're excited about it.

 

[deleted171991]

AMC stocks are for speculators. The moment the number of hospitals hiring their own anesthesiologists reaches a critical value (it will happen with all this consolidation and payment bundling), AMCs are dead. No big corporate health system will hire middlemen.

 

[Twiggidy]

View attachment 209589

Where'd you find that picture of @Twiggidy?

I kid I kid.[/QUOTE]

lol

 

[BLADEMDA]

If you're not an owner, not getting any bonuses, etc, what exactly are you buying into? More specifically, why is your salary reduced the first 2-3 years? This makes no sense to me.

There are some jobs offered by AMCs in desirable locations which are decent. They start you out in the 300's then over 3 years you max out at $450-$500 plus 401K contributions.
Considering the overall job market that isn't a terrible deal these days.

 

[Psai]

There are some jobs offered by AMCs in desirable locations which are decent. They start you out in the 300's then over 3 years you max out at $450-$500 plus 401K contributions.
Considering the overall job market that isn't a terrible deal these days.

That's not bad but depends on how much work they want you to do

 

[Robotic Wis-Hipple]

There are some jobs offered by AMCs in desirable locations which are decent. They start you out in the 300's then over 3 years you max out at $450-$500 plus 401K contributions.
Considering the overall job market that isn't a terrible deal these days.

I'm not saying 300's is terrible to start. I just don't see why, if you're signing on as an employee, they start you at a lower salary and then work you up. It's like they're capitalizing on the very idea of partnership jobs. If 3yrs later i'm the exact same anonymous cog in the same machine I was when I started, what did my 50-100k a year pay for? The right to work for some AMC?

 

[IlDestriero]

I'm not saying 300's is terrible to start. I just don't see why, if you're signing on as an employee, they start you at a lower salary and then work you up. It's like they're capitalizing on the very idea of partnership jobs. If 3yrs later i'm the exact same anonymous cog in the same machine I was when I started, what did my 50-100k a year pay for? The right to work for some AMC?

Agree. That's total BS.


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Il Destriero

 

[deleted171991]

They do it because they can. Such is the market. None of this makes sense, including buying in for hundreds of thousands into a business with almost no value, unless they still have many years left of a strong binding contract with the hospital.

That's the value of an anesthesia business, the capacity to generate profits for the remaining X years. Even if X=5, and one gives up $150K/year for 3 years for the honor of becoming a partner, one might never recoup the money if the group is fired after 5 years. Everybody assumes that an AMC will just waltz in and pay big bucks. I think history shows that those bucks are smaller and smaller, and that AMCs are beginning to pay just enough for the docs not to walk (especially at the end of the contract). Just food for thought.

 

[nycitygas]

Group I recently interviewed with is a bit unique.

They sold "ownership" to private equity 10 years ago and now have no partners. 90ish anesthesiologists, cover 9-10 hospitals, base salary first 3 years that escalates then plateaus. After second year get option to buy equity in the group. The equity ownership is brand new, so I'm waiting for contract ( to see nitty gritty details of it. Group is still growing as well, everyone seemed excited about the equity opportunity. All equal call from get go, vacation once hit 3 years.

They also contribute ~30k/yr 401k, setup for 52k max.

Is this AMG (phymed) in Nashville?

 

[kmurp]

I never supervise 4:1. Usually 2:1. The way it works where I work is that another Doc covers your rooms when you are giving a lunch break. Docs are in the rooms giving lots of lunch breaks though. I would be interested in hearing how other groups do it.

Do Docs give lunch breaks where you work? In order to have CRNA's give all the lunch breaks you would have to have a lot of CRNA's... and we do not have a lot of CRNAs. In fact many of the rooms are solo docs.

I just do it the best I can. Sometimes the CRNA will eat between cases. Sometimes, if a case is about to start during lunch, I will start the case personally and use that CRNA to break another CRNA in an ongoing room. I also start the lunches early at around 11::00. Lastly , our nurses don't take 30 minutes. They know that they can't otherwise others won't get lunch. To facilitate speed, our group purchases ordered out food daily.