?? re: Economics of PP anesthesia

[gasdoc77]

Hello all. Forgive me if this is been posted before someplace, but I have a few questions regarding AMC's. I realize the underlying profit motive, but was wondering if subsidized groups are subject to being bought out, or if they would simply be underbid and taken over. An unsubsidized group that was MD heavy could obviously be bought out, an ACT model implemented, and margins created or it could be simply employed by the hospital if they thought they could lean out the practice and profit from it or increase points of service. I ask because as a relatively new member of a huge group that is subsidized, I am unsure of how concerned I should be about vesting schedules. Fortunately, no monetary buy in is required (aside from time of coarse, which = money). It would seem that a practice already running a relatively lean ACT model with a subsidy would have little capacity for excess margin and thus be less attractive to the leeches, and possibly even viewed as a liability to them.

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[chmd]

Is it the case that hospitals are paid by AMCs for the anesthesia service contract? If so, then even the leanest, unsubsidized private practice group practice 4:1 could be in trouble -- especially if in a medium (or larger) and/or popular city.

 

[Mman]

how a group is structured and how a take over or buyout works can be complicated.

In the end, anesthesia services generate revenue. If a group is being paid a subsidy by a hospital it's likely because the revenue generated is terrible (bad payer mix, bad case mix, etc), or at least relatively speaking. An AMC exists to make money. If a private group is already being efficiently run in an ACT model, it's going to be hard for the AMC to be able to squeeze any more profit out of the anesthesia practice other than by having substantially better contract rates with private insurers (and that assumes you have enough insured patients to make a difference).

 

[BLADEMDA]

AMCs are also quite good at squeezing more money out of hospital administrators and/or reducing the level of services if the stipend is inadequate. In short, an AMC can usually do better than the existing Group in securing a stipend and getting better contracts with insurance companies.

 

[IlDestriero]

If you're working a full schedule for several years for less than the partners are making, you're paying to buy in. Often quire a lot.
An unsubsidised group providing quality service would be difficult to replace, unless the hospital wanted to try to employ them directly.

 

[jwk]

Rule #1 - there is ALWAYS someone who will to it cheaper. Maybe not better, but certainly cheaper. And fortunately, at some point, some hospitals find out that cheaper isn't better, and dump the AMC. Not a frequent occurrence - but it happens.

 

[BLADEMDA]

If only the issue was "quality" and not "cost." These days some administrators don't care about anything but cost. Patient care, quality of care, etc comes secondary to the almighty dollar. AMCs do have an edge on cost because they are ruthless in pursuit of the money. The AMC mantra is "Greed is Good" and they will slash and burn quality and salary to the bone.

A Group which receives a substantial subsidy (? anything over $400K) is at risk of being taken over by an AMC or losing the contract outright. A Group like JWK's is much less at risk of being taken over BUT not being sold to an AMC. The climate out there is horrible And I'm not referring to the weather.

 

[BLADEMDA]

If you are one of the fortunate few to have a good job count your blessings. Each day I hear of young, recently Boarded Anesthesiologists getting hosed over by their senior members or an AMC. More and more groups will sell or simply fold up shop in the next few years. If you think you are immune to market forces then you are foolish.
You must prepare for the day when your group is sold or taken over by the hospital/AMC. If that happens next year will you be ready? What about in 5 years? Do you have a back-up plan? Do you have a plan at all?

My advice to a PGY-3/PGY-4/PGY-5 is to earn a few dollars and begin a business venture of some sort. Despite your risks of the business it is a much better path to the upper middle class lifestyle than Anesthesiology. Stop worrying so much about the AANA and focus on your own personal financial affairs. The USA is still the land of opportunity but no so much any longer for Anesthesiologists.

The days of getting wealthy off anesthesia are coming to an end.

 

[Block-Buster]

well, this is depressing...

 

[BLADEMDA]

The Salary being paid by hospitals and AMCs are still decent. The opportunity still exists to do quite well if you live modestly and save money. But, for those who haven't earned a real paycheck the gross figure of salary is misleading because taxes will consume a large portion of that money.

My advice is plan on working hard and saving as much money as possible. But, if you want to become wealthy the path for that type of success isn't in anesthesia unless you own a management company.

 

[AngryBird69]

On my derm rotation at a private facility, the docs were echoing the doom and gloom seen on this forum. They spoke of how the "days of 700k were gone" and how the specialty saw it's hey day. It's not just anesthesiology, it's all of medicine from the the thriving shingle FM practices to the fancy proton beam rad onc super facilities. This country is in an unfortunate and embarassing financial state and things will continue heading south for us if the economy continues to do so.

 

[Mman]

On my derm rotation at a private facility, the docs were echoing the doom and gloom seen on this forum. They spoke of how the "days of 700k were gone" and how the specialty saw it's hey day. It's not just anesthesiology, it's all of medicine from the the thriving shingle FM practices to the fancy proton beam rad onc super facilities. This country is in an unfortunate and embarassing financial state and things will continue heading south for us if the economy continues to do so.

It's everybody. Our country is broke. We spend too much money on heathcare, approximately 8% of which goes to physicians, but physicians are the bad guys and they want us to earn less money.

I'd be interested in seeing a comparison between the total amount of money earned in salary by physicians in 2013 compared to the total amount of money spent direct to consumer advertising of prescription drugs like Cialis.

 

[deleted171991]

It's all smoke and mirrors. The physicians are the scapegoats. The healthcare industrial complex has built an image of bad guys for physicians, and now the masses consider us the cause of all evil in healthcare.

Have you ever seen a hospital bill where your wonderful employer uses your name and yours only to bill the patient disgusting amounts of money? I have. ($750 bill for a 20 minute outpatient ultrasound from the radiologist employee, and the same amount separately from the hospital for facility fees.) No wonder they think we made millions. No wonder they hate us; if I were not a doctor, I would feel the same.

 

[IlDestriero]

If the AMA had a spine, they would publish an ad in every major newspaper and magazine with the cost breakdown of healthcare. A big pie chart with the tiny physician sliver. The tag line could read something like "Follow the money. Support your local physicians, they're not responsible for making health care expensive. Call your local congressmen/senator and demand REAL reform, not physician salary cuts.". The PR guys can clean it up a bit.

 

[IlDestriero]

When the bottom falls out, maybe I can run for office. Way more money to be made there.

 

[gasdoc77]

I too have considered the political arena as a viable alternative or perhaps a Charlie Sheen-esque "Torpedo of Truth" tour.

 

[IkeBoy18]

with PP being "phased out," will there still be opportunities for new grads to work their own cases in the future? Personally I would like to do my own cases for at least the first 5 yrs out before I have to join the CRNA circus. I would feel a lot better about my skills working in the real world first.

 

[pgg]

If the AMA had a spine

If the AMA wants to do any more damage to physicians, they can do it with someone else's money. They don't get any of mine.

 

[Silent Cool]

Why don't some of you start your own anesthesia group and undercut the current heavy weights? Like doing your own billing, etc.. and giving the hospital a chunk? That way you maintain control of the market. Am I right?

 

[norwood]

Why don't some of you start your own anesthesia group and undercut the current heavy weights? Like doing your own billing, etc.. and giving the hospital a chunk?

(emphasis mine)

It's currently considered extremely competitive for a group merely not to be getting a subsidy from the hospital. To do this, a lot of groups do unsafe things like 4:1 ratios. I can't imagine how low pay would have to be in order to be giving money to the hospital.

 

[gasdoc77]

Agreed. In order to simply be unsubsidized, a practice would need a great payer mix, a lean staffing model, and would probably still be very mediocre in terms of packages making it difficult to attract talent. We already run lean (usually 4:1), provide a high level of service such as echo, regional with catheters (up to and including tap blocks, adductor canals, the gamut of upper/lower extremities and neuraxial) and we are a major referral center for acute stroke and cardiac covering multiple facilities......in fact, maybe we need to be holding the hospitals feet to the fire a little more come to think of it

 

[scudrunner]

Why don't some of you start your own anesthesia group and undercut the current heavy weights? Like doing your own billing, etc.. and giving the hospital a chunk? That way you maintain control of the market. Am I right?

That would be a kickback, which is illegal in the medical profession.

My take:

All politics are local. Best way to get control of your market is to get smart, likable anesthesiologists on the hospital board and in administrative positions to influence contract decisions and develop good business relationships.

 

[BuzzPhreed]

If only the issue was "quality" and not "cost." These days some administrators don't care about anything but cost.

This is true. The assumption is that the quality is there. I heard this at a talk at the last ASA meeting. This is because like most everyone else they have no clue what it is we actually do. In their minds CRNAs and 'ologists are interchangeable.

Who's cheaper? Ask yourself that. Because that's all administrators care about.

 

[BuzzPhreed]

Each day I hear of young, recently Boarded Anesthesiologists getting hosed over by their senior members or an AMC. More and more groups will sell or simply fold up shop in the next few years. If you think you are immune to market forces then you are foolish.

This is also true. I lived it very temporarily firsthand.

 

[BuzzPhreed]

The only way PP groups are going to survive vertical integration now ongoing in the medical profession is to consolidate and adopt the AMC model. Many if not most will no longer offer partnership tracks to people coming out of training. Maybe if you kiss enough ass for a few years they may invite you into the members-only part of the club. But be prepared to compromise what you know is right in the meantime and tow the party line. You will be doing complex cases with CRNAs less than a year out of school in a 4:1 ratio. You will be essentially relegated to doing pre-ops and putting out fires. And you will be completely exhausted at the end of your 10+ hour day.

Until the day the surgeons stop being seen as the revenue generators by bringing work to the hospital or we going to single fee for services divvied up by the hospital, this system will not change. Never forget that it is still your medical license that they could care less about jeopardizing putting you in tenuous clinical situations that stretch the limit of being able to practice safely. And never be afraid to vote with your feet. If enough of us weren't afraid do to locums this would change. But the allure of private practice and ownership is rapidly dying for our profession.

 

[netrunner]

Don't worry. There are good PP groups out there with a good business model. Yes, the days of 700k are over, but that is because you are now expected to actually earn your startup and time units. Peri-operative care is in--something we should have been doing aggressively from the very beginning (pre-op clinics and ICU care). When you provide a lot of value-added services, it dilutes your income but solidifies your standing in the hospital (harder to kick out).

They problem is, these well-run PP groups don't want mediocre anesthesiologists and there are many many mediocre grads. Make sure you work your a__ off in residency and be at the top technically and knowledge-wise. This will mean you need to dump the attitude many new matriculants have entering anesthesia--work short days and make a ton of $$.

Work hard and be better and you will NEVER feel threatened by a midlevel and you might see 700k if you can be an effective corporate leader...

 

[IkeBoy18]

Don't worry. There are good PP groups out there with a good business model. Yes, the days of 700k are over, but that is because you are now expected to actually earn your startup and time units. Peri-operative care is in--something we should have been doing aggressively from the very beginning (pre-op clinics and ICU care). When you provide a lot of value-added services, it dilutes your income but solidifies your standing in the hospital (harder to kick out).

They problem is, these well-run PP groups don't want mediocre anesthesiologists and there are many many mediocre grads. Make sure you work your a__ off in residency and be at the top technically and knowledge-wise. This will mean you need to dump the attitude many new matriculants have entering anesthesia--work short days and make a ton of $$.

Work hard and be better and you will NEVER feel threatened by a midlevel and you might see 700k if you can be an effective corporate leader...

I really like the idea of the surgical home and pre op clinics. any ideas on when this could be main stream?

 

[countingdays]

I really like the idea of the surgical home and pre op clinics. any ideas on when this could be main stream?

I really think the surgical home is a nonstarter. Anyone ever ask what portion of a bundled payment the average surgeon would give up for this service?

 

[norwood]

I really think the surgical home is a nonstarter. Anyone ever ask what portion of a bundled payment the average surgeon would give up for this service?

It's the same in medicine as it is in three-card monte. All the shuffling around is meant to distract you while someone else keeps YOUR money.

 

[BuzzPhreed]

Peri-operative care is in--something we should have been doing aggressively from the very beginning (pre-op clinics and ICU care).

This is a battle with the insurance companies. They don't pay separately for preop evaluations so no one does them until the day of. ICU care pays poorly in comparison to anesthesia. Until this changes nothing will change. Count the beans, man. That's all anyone cares about in the business of medicine anymore. The patient is secondary. You can't write a protocol for every contingency. Yet this is what is now expected. And the "nursingizing" of the practice of medicine continues.