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Large Corps buying out practices

Discussion in 'Pathology' started by KeratinPearls, 04.16.12.

  1. KeratinPearls

    KeratinPearls

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    Is this becoming more common? I hear and have read of Ameripath for example buying out practices? So there is no partnership potential if you are hired for this type of job? Will the future consist of large corporations owning practices? From what I've been hearing there are less partnership track jobs and practices are being bought out.
  2. WEBB PINKERTON

    WEBB PINKERTON

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    Sounds like the present to me.

    The future will just be some scattered niche labs with most of our bread and butter specimens done point of care as technology improves.
  3. KeratinPearls

    KeratinPearls

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    What do you mean by the latter?
  4. 2121115

    2121115

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    It is actually becoming less common, since Ameripath and others have discovered that it isn't that profitable to buy individual practices.
  5. sirenomelia

    sirenomelia

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    I thought the thread title was to imply mummies were getting into pathology
  6. pathstudent

    pathstudent Sound Kapital

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    How is it not profitable? The formula is set up so that Quest-Ameripath makes all their money back in 7 years, after that it is all profit.

    Selling your practice is a great idea if you are ready to retire/go part-time in a couple years. It is questionable if you are mid-career or younger as over the long run you will earn far more over your career by not selling (however you get the security of putting 1.5-2.0 million in the bank at a young age, which may seem desirable given the uncertainties of life).

    It is a disaster for all non-partner and future hires as they will be having about 50% of their income going to the corportation.
  7. gbwillner

    gbwillner Pastafarian Moderator

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    [​IMG]
    free image hosting

    "I'll swallow your technical component billing!!!"
  8. KeratinPearls

    KeratinPearls

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    Thats a scary urologist!

    "Read my prostates or die pathologist!:
    Last edited: 04.18.12
  9. yaah

    yaah Boring Administrator

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    I think it's becoming less common to buy practices, actually. I may be wrong though. When practices get bought the partners cease to have any real motivation to pursue growth and work as hard as when they were equity partners. So that impacts the bottom line for the reference lab. I think their strategies have but shifted much more to outpatient facilities and doctor's offices.
  10. 2121115

    2121115

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    There are a variety of reasons, but overall it is less common now than it was in the past. Ameripath, Aurora Diagnostics, etc were buying up practices at a rapid rate but it has slowed.
  11. pathstudent

    pathstudent Sound Kapital

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    It could be that the practices that were likely to sell have all been sold.
  12. KCShaw

    KCShaw

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    And there are other ways to get the same business, without buying them outright.
  13. lipomas

    lipomas

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    I read something recently about Aurora (who keeps buying dermpath practices). They are in a lot of debt because they keep buying practices at inflated rates but the business level isn't maintained for various reasons. So I think ref labs are looking more carefully at these deals and not just throwing money around.
  14. mlw03

    mlw03 Senior Member

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    Could someone in community/diagnostic pathology explain a little why working for a company like Ameripath is generally frowned upon here? I'm not trying to be provocative, rather I'm an FP so I really know very little about the diagnostic path job situation. How are these jobs structured? Does a pathologist work a set number of hours? Set number of cases? Slides? How much/little interaction with clinicians occurs? Is it mostly biopsies? If resections, where and by whom are they grossed? Are there any potential benefits for some folks to working in this type of situation?
  15. 2121115

    2121115

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    Are you referring to a situation where Ameripath buys a hospital based group and makes them employees or a situation where a pathologist works as an employee at a Lab Corps free standing office and specimens are sent in (i.e. pathologist does not work at a hospital)?
  16. mlw03

    mlw03 Senior Member

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    In my head I was thinking more the latter, but I'd be curious to hear views about either/both.
  17. pathstudent

    pathstudent Sound Kapital

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    The ones that I have met have been hospital based pathologists whose groups were bought by Quest (Ameripath). Basically Ameripath skims half the money that would be going to the pathologists if they had not sold their practice. So the ones that come after or didn't benefit from the sale generally become quite bitter especially when you consider that they will increase their workload (i.e. get a new contract with a GI group) without increasing salaries or do away with their annual bonuses. For example pathologist I met said she would sign out on average100 GI biopsies a day in addition during doing some surgical work from the O.R.s at her hospital She was making 275k a year. The medicare revenue (i.e. essentially the minimim) from the global on 100 88305 is at more than10k with about 3.5-4k of that professional. So Quest is paying her about a 1k a day. You do the math. In the classical private practice model the group would keep the 10k, minus expenses for billing and costs for slide processing and reporting etc... (which you can get done for pretty cheap).

    Another downside is you don't have the same ability to dictate how your practice runs. You got suits telling you how to do things.

    But on the upside, you can just come in, sign out some cases, and go home with a paycheck. You don't have to learn how to run a business. And that might appeal to some people.

    The few that I have met that worked at pathmills (i.e. doing only outpatient work in a cubicle devoid of contact with outher docs) in general have burned out pretty quickly from that.
    Last edited: 06.14.12
  18. 2121115

    2121115

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    The latter should be pretty easy to figure out why it is a bad job. The former is all about $$ and control, as posted above. And by the way, if someone is a person who would rather not "learn how to run a business" for significant extra $$$ per year, then they are either extemely lazy or an idiot. Once they own your practice they just keep increasing the volume without a concomitant increase in salary.
  19. mlw03

    mlw03 Senior Member

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    It's not obvious to me why the latter situation would be bad. What's so bad about coming in, having a stack of slides to deal with, then doing so for pay? No administrative BS, billing issues, CP crap folks seem to hate. Just you and your stack o' glass. What's so bad, assuming you're making $200K or so for one's services and you actually like looking at prostate/GI/skin/etc biopsies all day.
  20. KCShaw

    KCShaw

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    I think it's the relative knowledge. Doing your work and going home is one thing. But I can see how one could be disgruntled knowing that someone else is "significantly" profiting from the work you are doing and at best partially sharing the litigious risks you are taking, when you could be taking far more of that profit. I wouldn't want to be an underling to an MBA who is profiting from the time and expense -I- put in to become trained and certified to do the job. A big point, I suspect, is that the profit margin appears to be quite substantial, and arguably not worth the trade to avoid administrative headaches -- perhaps the follow-up question is just how difficult and stressful is running or being a business partner in your own pathology lab? It's hard for most people to agree that trading 600+k for 200k is a fair deal, even while recognizing that not everyone can or should run a business of any sort. I have assumed this is also why some practices have hired in business managers as underlings for a controlled and arguably more "fair" salary, rather than selling out to a larger corporation that drinks up a lot of what could be personal profit.
  21. pathbot

    pathbot

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    While I recognize that working for such corporations, as opposed to traditional private practice, results in a loss of profit share, how is working for academics much different? I am sure that most academic pathologists generate much more revenue for their university than what they get paid. In the end, working for academics usually means even less of a salary as opposed to working for Ameripath, etc. Yes, academics may get "protected" research time in return, but not everyone wants to do research and/or teach, and pushing glass all day to pay the bills may be satifying for some.
  22. mlw03

    mlw03 Senior Member

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    Well-made argument. I suppose a counter point could be that academia invests that money into the missions of the department, whereas Ameripath distributes it to shareholders. So it could be an issue of nobility. But for the guy/gal who has to do the work, it plays out the same. And people on here do tend to rag on academic jobs for that sort of reason.
  23. yaah

    yaah Boring Administrator

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    That's a big reason why people keep taking these jobs - they will take less compensation to not have to deal with the "side" issues.

    Part of the reason many of us would not want to work for a corporate job has been spelled out above - loss of autonomy, loss of incentive. If you control your own group you can expand, gain business, make connections, and it can benefit you. If you don't there is no reason to do any of this. You might get a "bonus" for doing more work but your income is essentially capped. Being owned also makes you less flexible to respond to trends and threats.
  24. mlw03

    mlw03 Senior Member

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    Thanks for the explanation, yaah. So it sounds like the big con to these jobs is loss of autonomy, but the big pro is that you're just able to do diagnostic path without having to worry about other stuff.
  25. Maryjane52

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    No the biggest con is that you don't feel like a doctor anymore. You get stacks of almost identical specimen types, you get almost no follow though and the "client/customer" almost always assumes that you are less qualified than their hospital pathologist. The worst choice I ever made was to leave a bad hospital based practice ( a typical "eat your young" almost no hope for partnership or fair compensation private practice group) for one of the larger independent labs (which has long since been sold to another such lab). While no autopsies, no grossing and no call was enticing at first, it soon becomes apparent that the MBA types running the show cared less about quality than productivity. Specimen mix ups, tech errors and high support turnover were ongoing. After 6 years I took the money and ran, dealt with the drama of serial locums jobs and dealing with comphealth until I finally got another hospital position. It is far from perfect but now I feel like what I do has meaning, I know all of the physicians, many nurses and almost every lab person I know by name. While everyone is different, this is what worked for me. There are still lots of good hospital based pathology practices out there and if I had to do it over again, I would do just that, even if it meant moving to North Dakota.
  26. KCShaw

    KCShaw

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    Mainly for mlw, but I've likened it somewhat to working in a coroner system vs an ME system. In those scenarios while the finances aren't much different, the autonomy, expectations, ancillary services, and ability to affect and improve the working conditions and overall quality generally are. Still, some people definitely prefer that ability to throw problems off to the revolving coroner, and simply do their work and go home. But, many doctors just don't have that mindset -- they recognize a problem, are bothered by it, and would like to see it improved/fixed. Some things of course we recognize we just can't readily fix, but that's different from a non-medical admin/MBA/coroner/whatever simply not caring about what you find important, or even actively making your job more difficult in order to further their own separate aims, whether they be political or financial or whatever.

    A fair point was raised about academics, but I think people join an academic department with a better understanding of the trade-offs. After all, most pathologists spent 4-6 years of training in one or more academic departments. The pace is usually a little slower particularly if there is a residency program, there is a little more freedom to work up cases with wild abandon, there are usually a few very knowledgeable and experienced pathologists around who are usually more available for hallway consults, ancillary resources are usually a little more available, there is usually a little more time built in for other pursuits (even if a lot of it happens to be spent on catching up, that's time not spent after hours at work at the scope), etc., and there is more of a sense that you're subsidizing a pertinent institution, including your own department, rather than simply the pockets of a few bungholes solely interested in "your" money.
  27. 2121115

    2121115

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    Oh no, if Ameripath buys your practice you still get to do all of the administraive stuff, CP crap, etc (maybe not billing). You still work in the hospital and do your work as lab director, etc. It is not just looking at glass all day. It is doing the same job at higher volume for less pay.
  28. mlw03

    mlw03 Senior Member

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    If that's the case, why would a group sell to an Ameripath? Do the original partners who sell make out like bandits in that scenario?
  29. 2121115

    2121115

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    Yes, definitely. That is the only reason to do it.
  30. mlw03

    mlw03 Senior Member

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    If that's the case, why not sell out to younger pathologists? Or does Ameripath overpay for these practices up front, making it too sweet a deal for the group's owners to turn down? I'm sorry if this is obvious to private practice folks, but this is rather interesting to me from the outside. And something I learned nothing about in residency.
  31. pathstudent

    pathstudent Sound Kapital

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    Yaah, what are you talking about. If you are a hospital based ameripath pathologist, you still have to participate in hospital committees (QMEC, MEC, Peer Review, Credentialing, transfusion committee, cancer committee, Infection Control, etc....), take overnight and weekend call, do frozens, maintain good customer relations, negotiate contracts with asministration, and you have to even try to get new business (I know a pathologist who is asked to go be part of the sales team to get urology business)

    The only things you don't have to deal with are some aspects of running the business (negotiating contracts with insurance companies), having employees (techs or PAs or secretaries. The latter are not what a newbie to a group would be involved with anyway.


    People take these jobs because

    1) They are right out of training and don't know the difference

    2) They are geographically restricted and it is what is available

    Now if you are a pod lab or sitting in a cubicle signing out GI biopsies for Quest, then you will have less "side" issues.
  32. pathstudent

    pathstudent Sound Kapital

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    And Quest (ameripath) buy these practices not because they are interested in managing community hospital based pathologists; they are interested in buying the outpatient contracts they hold. That is where the money is at.
  33. Tissue issue

    Tissue issue Member

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    Wow. Thanks for sharing your story.

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