MEDNAX buy out--stay or go

[urge]

Pretend scenario. 10 docs, $30M from the AMC in exchange for 10 year contract at $250K each. The $30M is paid up front as a lump sum to the group to distribute however they want, presumably they do so equally to all 10. From then on out, each doc is working for $250K per year. If a doc leaves, the AMC hires a replacement at $250K per year. Same cost to AMC.

The group wants a clawback so the other 9 docs don't feel screwed by the guy leaving right away. If he/she knew they were leaving right away, then the $30M could be split amongst the remaining 9, not all 10, so they'd each get more ($3.3M instead of $3M).

And yes, the AMC can replace 70 subspecialty trained FTEs. They don't have to replace all with internal options, they can afford to pay a locums company short term. And remember, not everybody is leaving because they have noncompete clauses that limit where they can work geographically and presumably most have family ties to their present location.

Mednax and NAPA explicitly told us they don't care if somebody leaves early from their contract, so long as they don't violate the noncompete part of it. That's really the only part they care about.

And the new grads in the area are now bound to 250k because some guy took 3 million up front.

You are ruining the salaries of generations to come.

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[Mman]

And the new grads in the area are now bound to 250k because some guy took 3 million up front.

You are ruining the salaries of generations to come.

1) the new grads are bound to whatever someone offering a job is willing to pay
2) I'm personally not ruining anything. In case you forgot, we told the AMCs to f off. I'm saving the salaries of generations to come.

 

[urge]

1) the new grads are bound to whatever someone offering a job is willing to pay
2) I'm personally not ruining anything. In case you forgot, we told the AMCs to f off. I'm saving the salaries of generations to come

1 The idea is that it creates the impression that 250k is a normal salary. It is all mental. If an anesthesioligist with 20 yrs of experince is getting 250, why should a new grad get more? Never mind the 3 million they had to pay the old dude to work for 250.

2 Generations to come thank you.

 

[caligas]

1 The idea is that it creates the impression that 250k is a normal salary. It is all mental. If an anesthesioligist with 20 yrs of experince is getting 250, why should a new grad get more? Never mind the 3 million they had to pay the old dude to work for 250.

2 Generations to come thank you.

From pure economic terms, Urge may be incorrect, and it's no one individual in the wrong, but he has a point that the profession as a whole has, and continues to mortgage its future.

 

[BLADEMDA]

From pure economic terms, Urge may be incorrect, and it's no one individual in the wrong, but he has a point that the profession as a whole has, and continues to mortgage its future.

You guys are blind. The gig is up. The profession, as you call it, is an employment model for 60-80% of the those working in it. Sure, just like ER there will be small groups that control the contract but most will be an employee of said group, AMC or the hospital itself. If that isn't your cup of tea don't go into the field. In addition, if you hate night and weekend or plan on earning over $500K annually then one should avoid the field as well.

Remember, the AANA has been mortgaging your future for two decades now and while they have been digging their way out of the ACT model with a spoon the fact remains the inmates will soon be free.

 

[caligas]

You guys are blind. The gig is up. The profession, as you call it, is an employment model for 60-80% of the those working in it. Sure, just like ER there will be small groups that control the contract but most will be an employee of said group, AMC or the hospital itself. If that isn't your cup of tea don't go into the field. In addition, if you hate night and weekend or plan on earning over $500K annually then one should avoid the field as well.

Remember, the AANA has been mortgaging your future for two decades now and while they have been digging their way out of the ACT model with a spoon the fact remains the inmates will soon be free.

I don't disagree with any of that and I hope med students take heed of your warnings. I'm just saying that I can understand the sentiment of fresh grads that feel, right or wrong, that the older generations have sold them out.

 

[BLADEMDA]

I don't disagree with any of that and I hope med students take heed of your warnings. I'm just saying that I can understand the sentiment of fresh grads that feel, right or wrong, that the older generations have sold them out.

The real "sell-out" was the ACT model. Surgeons recognized this decades ago which is why they don't train surgical NPs to do their hernias and lap choles.

 

[urge]

You guys are blind. The gig is up. The profession, as you call it, is an employment model for 60-80% of the those working in it. Sure, just like ER there will be small groups that control the contract but most will be an employee of said group, AMC or the hospital itself. If that isn't your cup of tea don't go into the field. In addition, if you hate night and weekend or plan on earning over $500K annually then one should avoid the field as well.

Remember, the AANA has been mortgaging your future for two decades now and while they have been digging their way out of the ACT model with a spoon the fact remains the inmates will soon be free.

I think employee model is the way to go. I have always been against the predatory PP model. However, it is not the same being an employee for 500 than for 250, when the reason there are people willing to work for 250 is because they got a few million lump sum, and now are misrepresenting the market to the new grads.

 

[urge]

1) the new grads are bound to whatever someone offering a job is willing to pay

You don't get it. The salary market is like the real estate market. Nobody knows how much a house is really worth. You look at the comps and decide from there.

Nobody knows what they should be getting paid either. People look for comps. That's why the MGMA, Medscape, Rand, etc, surveys exist. And that's why you guys keeps posting them here year after year. Imagine if that data were skewed way down because old anesthesiologists are getting several millions upfront to work for a low salary. They are screwing the new grads who don't know about the lump sum, and even if they did nobody will give it to them.

 

[deleted50478]

The real "sell-out" was the ACT model. Surgeons recognized this decades ago which is why they don't train surgical NPs to do their hernias and lap choles.

They're both real sell outs.

 

[Stank811]

They're both real sell outs.

Agreed. Urge is on point. If you are billing 15000 total ASA units a year per FTE( probably more if you supervise at high ratios) and the AMC blended unit is 70 dollars per unit. Do the math...what are you worth.

 

[Mman]

You don't get it. The salary market is like the real estate market. Nobody knows how much a house is really worth. You look at the comps and decide from there.

Nobody knows what they should be getting paid either. People look for comps. That's why the MGMA, Medscape, Rand, etc, surveys exist. And that's why you guys keeps posting them here year after year. Imagine if that data were skewed way down because old anesthesiologists are getting several millions upfront to work for a low salary. They are screwing the new grads who don't know about the lump sum, and even if they did nobody will give it to them.

I get it. I both am part of a group that hires them as well as someone that advises medical students. I have graduating residents that used to be med students with us from various parts of the country email me their job offers and ask me what I think of them.

What I'm telling you is that you are only worth what someone will pay you. Just because physicians got paid a lot more (inflation adjusted) 30 years ago doesn't mean we are worth that amount today.

 

[GravelRider]

Some CEO is going to be eating your profits while you take on the stress and liability. That is medicine. All in all it is a poor career choice. It's not just anesthesiology. All fields will be owned and employed. That is the future. Anytime there is a way to make money, the Wall Street guys will exploit it. This will last until we have a single payer system, at which point we will be government employees instead of employed by hospital CEOs and Wall Street.

The older generations sold us out through both sins of omission and sins of commission. They brought on the ACT model out of greed and laziness. They did not defend their turf. All while they told stories in the lounge about how much harder they had it in residency (which is bogus, by the way) than the new guys.

 

[BLADEMDA]

You don't get it. The salary market is like the real estate market. Nobody knows how much a house is really worth. You look at the comps and decide from there.

Nobody knows what they should be getting paid either. People look for comps. That's why the MGMA, Medscape, Rand, etc, surveys exist. And that's why you guys keeps posting them here year after year. Imagine if that data were skewed way down because old anesthesiologists are getting several millions upfront to work for a low salary. They are screwing the new grads who don't know about the lump sum, and even if they did nobody will give it to them.

The fact is the "salary" the AMC pays after the buyout is not low. Many former partners are paid in the range of $350-$500K after these buyouts. While I would not describe the pay as great the AMC is able to recruit new talent in that pay range provided they actually offer the new hire that salary. What I have found is the AMC wants to "low-ball" the new grad in the 225-250 range and place them on a track to get to $400K. In certain markets this strategy works but in other markets the AMC is forced to pay at least $350K most of the time to hire Board Certified General Anesthesiologists. If the job is hard or location demands a premium AMCs have been known to pay $400K. There is simply no truth to the claim that most AMC positions are in the sub $300K pay range.

 

[jwk]

And the new grads in the area are now bound to 250k because some guy took 3 million up front.

I thought most of these deals were structured as multi-year payouts, not a big lump sum up front. Perhaps $350k/yr salary, and lets say a $3M buyout paid out over 5 years at $600k/yr so that the bulk of it can be treated as capital gains and taxed at a lower rate. And the deals I've heard of DO have an obligation to stay on for X number of years.

 

[Arch Guillotti]

Mednax and NAPA explicitly told us they don't care if somebody leaves early from their contract, so long as they don't violate the noncompete part of it. That's really the only part they care about.

Seems like they would care since the AMC is presumably responsible for going out and replacing the anesthesiologist that departed.

 

[Mman]

Seems like they would care since the AMC is presumably responsible for going out and replacing the anesthesiologist that departed.

Why? They pay the same cost either way and they don't find hiring to be particularly difficult. They care more about getting your contract than what you do after they have it.

 

[Mman]

I thought most of these deals were structured as multi-year payouts, not a big lump sum up front. Perhaps $350k/yr salary, and lets say a $3M buyout paid out over 5 years at $600k/yr so that the bulk of it can be treated as capital gains and taxed at a lower rate. And the deals I've heard of DO have an obligation to stay on for X number of years.

Nope, it's calculated as X number of years working to make the buyout a given number, but the buyout is always a lump sum up front taxed as a long term capital gain. A group could do whatever they wanted with that lump sum, though, and could hold it and distribute portions annually to former partners. That money, though, would likely be subject to corporate taxes each year it sat there and negating the tax benefit of doing it in the first place.

 

[Arch Guillotti]

Why? They pay the same cost either way and they don't find hiring to be particularly difficult. They care more about getting your contract than what you do after they have it.

So why do they they have so many ads on gaswork?

 

[BLADEMDA]

So why do they they have so many ads on gaswork?

Salary at the 25th-40th percentile with crappy benefits. In addition, you are a cog in the machine.

 

[Arch Guillotti]

Salary at the 25th-40th percentile with crappy benefits. In addition, you are a cog in the machine.

I understand and agree. Mman is saying they don't find hiring to be particularly difficult.

 

[Mman]

I understand and agree. Mman is saying they don't find hiring to be particularly difficult.

The will have ads from here until time ends. That doesn't mean they are lacking manpower, it just means they will have a continual churn of bodies to fill their slots. Please don't pretend like they have locations they can't staff with somebody.

 

[sevoflurane]

The will have ads from here until time ends. That doesn't mean they are lacking manpower, it just means they will have a continual churn of bodies to fill their slots. Please don't pretend like they have locations they can't staff with somebody.

Do know anything about the biggest AMC deals in recent history? MAC and Valley anesthesia?

Why don't you ask those guys how the recruiting is going?

 

[sevoflurane]

I'm sure things will level out over time, but it's not as easy as you make it out to be. In the mean time, guess who picks up the slack?

 

[Robotic Wis-Hipple]

Do know anything about the biggest AMC deals in recent history? MAC and Valley anesthesia?

Why don't you ask those guys how the recruiting is going?

The Valley deal? Please spill.....

 

[exchangeroad]

Mountainman12 I'm in a similar situation. I say GTFO, that's what I'm doing. I too would have ran like hell if there was any talk of selling back when I signed. The 300k take home payout isn't worth it, but the free iphone would have me second guessing my decision to leave.

I find it hilarious that you are being offered roughly 25% of full partner buyout after taxes. Sure they could have offered nothing, but the end result is the same- good, young anesthesiologists are leaving.

Thanks but no thanks. Have fun trying to recruit good anesthesiologists after the AMC takes over. I'm out.

 

[deleted50478]

Mountainman12 I'm in a similar situation. I say GTFO, that's what I'm doing. I too would have ran like hell if there was any talk of selling back when I signed. The 300k take home payout isn't worth it, but the free iphone would have me second guessing my decision to leave.

I find it hilarious that you are being offered roughly 25% of full partner buyout after taxes. Sure they could have offered nothing, but the end result is the same- good, young anesthesiologists are leaving.

Thanks but no thanks. Have fun trying to recruit good anesthesiologists after the AMC takes over. I'm out.

Recruiting will be easy because 'private practices' are just mini AMCs looking to screw over the new guy too. You can't avoid AMCs when they are the whole job market.

 

[Ezekiel2517]

Do know anything about the biggest AMC deals in recent history? MAC and Valley anesthesia?

Why don't you ask those guys how the recruiting is going?

the mac deal has already had a pretty big impact on the rest of Bay Area. Yes, they have had more turnover, but believe it or not, there are quite a few people leaving their PP jobs in the area to go to mac.

 

[Scotty_G]

The thing is many young grads will and do sign up with AMC jobs. I think the population on SDN is the minority. I try to tell every young attn/res/fellow about the pitfalls of AMC's but many still join. Especially in warm and/or desirable areas! I am one of the few fortunate people on here who did part of their training in a private hospital aside from the academic base. Why am I fortunate you ask? Well that private group at the hosp which was all MD/DO was purchased by Sheridan shortly before I started. I learned and saw firsthand the AMC model. The best part is people stay on to work at the hosp. Sheridan makes so much off each attn it is a crime. If I told you guys the hrs/pay you would laugh.

 

[GravelRider]

Recruiting will be easy because 'private practices' are just mini AMCs looking to screw over the new guy too. You can't avoid AMCs when they are the whole job market.

You can't avoid them, but you can UNIONIZE. You talk to any hospital or company administrator and they shudder when thinking about the day that physicians get wise and talk seriously about unionizing. The problem is that conditions are going to have to get much worse until it becomes a true force to be reckoned with. Imagine if every physician in the Harvard Partners system joined a union and threatened a shut down if certain demands weren't met. That's power. We have it, we're just afraid to use it.

 

[IlDestriero]

The thing is many young grads will and do sign up with AMC jobs. I think the population on SDN is the minority. I try to tell every young attn/res/fellow about the pitfalls of AMC's but many still join. Especially in warm and/or desirable areas! I am one of the few fortunate people on here who did part of their training in a private hospital aside from the academic base. Why am I fortunate you ask? Well that private group at the hosp which was all MD/DO was purchased by Sheridan shortly before I started. I learned and saw firsthand the AMC model. The best part is people stay on to work at the hosp. Sheridan makes so much off each attn it is a crime. If I told you guys the hrs/pay you would laugh.

You can tell us, we like to hear what's being offered out there.


--
Il Destriero

 

[pgg]

If I told you guys the hrs/pay you would laugh.

I could use a good laugh.

 

[Arch Guillotti]

Me too.

 

[Scotty_G]

350k starting attn for 70-80 hr/week full time attn. You don't do a lot of call but it doesn't matter lol. If you want to do hourly it is an even bigger joke. You get paid less than a crna; rate is 110-115/hr and you still would probably do 45-50 hrs/week without call lol. There are still increases but you will probably cap off around 4-425k. Also the chairman controls who gets the increases so the big suckups may get an increase before someone who has been there longer. This place EASILY bills 15k units/yr/attn and possibly more. The one positive is that it has remained MD/DO only. No crna's were brought on board. You can pm for the name of the hospital/group if you desire. I heard a few numbers thrown around about their avg unit value. It was high before the buyout and is obviously better now.

P.S. The partners used to make 800k/yr before the buyout :0
P.S. Near a major metropolitan area

 

[Machinery]

Everyone in that group should tell them to eat a giant bag of d1cks. Then, keep your practice and your income for the foreseeable future.

I was going to post a reply, but this phrase pretty much summarizes what I had to say.

 

[Psai]

350k starting attn for 70-80 hr/week full time attn. You don't do a lot of call but it doesn't matter lol. If you want to do hourly it is an even bigger joke. You get paid less than a crna; rate is 110-115/hr and you still would probably do 45-50 hrs/week without call lol. There are still increases but you will probably cap off around 4-425k. Also the chairman controls who gets the increases so the big suckups may get an increase before someone who has been there longer. This place EASILY bills 15k units/yr/attn and possibly more. The one positive is that it has remained MD/DO only. No crna's were brought on board. You can pm for the name of the hospital/group if you desire. I heard a few numbers thrown around about their avg unit value. It was high before the buyout and is obviously better now.

P.S. The partners used to make 800k/yr before the buyout :0
P.S. Near a major metropolitan area

Well yeah I wouldn't waste money on an expensive crna when I have a cheap md for 350 for 70-80. No crna would take that deal ever. Man for those hours you should be getting a mil come on

 

[pgg]

350k starting attn for 70-80 hr/week full time attn.

 

[anes121508]

So

Nope, no fellowship. It has crossed my mind though. I turned down a fellowship to take this job. Yeah, probably a mistake.

Curious, what did you end up doing? How has it turned out?