Tenet Looks At Replacing Local EM & Anesthesiology Docs

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Interesting post about "Tenet Looks At Replacing Local EM & Anesthesiology Docs" on Sermo:https://mobile.sermo.com/posts/posts/222101

Doctors: Tenet Healthcare may end some local medical service contractsMedical groups say the owner of Sierra Vista and Twin Cities hospitals may contract with nationally based firms instead of local providers for some services

BY JANET LAVELLE

[email protected]

June 1, 2014

Physicians at Sierra Vista Regional Medical Center have been notified that Tenet Healthcare Corp., the hospital’s owner, may contract with a national company to provide some medical services.

The plan would affect Sierra Vista in San Luis Obispo, Twin Cities Community Hospital in Templeton and an unknown number of other Tenet-owned hospitals in California.

According to several sources, Tenet is considering ending contracts with local medical groups providing anesthesiology, emergency department and hospitalist care. Tenet would contract with a single national company to provide those services at a lower rate to some or all Tenet hospitals in California, several physicians told The Tribune.

Tenet, a for-profit company based in Dallas, owns 77 hospitals nationwide including 11 in California, according to its website.

Officials at both Sierra Vista and Twin Cities declined to comment on the plan in specifics.

Sierra Vista spokesman Ron Yukelson said the hospital, like all hospitals, is reviewing costs.

A spokeswoman at Twin Cities referred all questions to Sierra Vista officials last week.

Tenet corporate spokeswoman Ellen Beth Levitt said Friday she didn’t know anything about the matter.

But the executive committee of the Sierra Vista medical staff was informed of the plan Tuesday, chief of staff Dr. William Sogaard confirmed.

In response, the committee, which represents the 400 physicians who use the hospital, held an emergency meeting and took a position opposing the plan, he said.

“It’s certainly an unprecedented occurrence in my personal experience and probably with everyone else on staff,” Sogaard said Friday. “Our stance is we are opposed to it, but beyond that I would like to talk to our attorney before making any further comment.”

Sogaard is a partner in San Luis Hospitalists, an 11-physician medical group with contracts to provide in-hospital physician services to Sierra Vista, as well as to Dignity Health-owned French Hospital Medical Center in San Luis Obispo and Arroyo Grande Community Hospital.

Dr. Christian Voge also is a partner in the hospitalist group, which is physician-owned. He was told that Sierra Vista CEO Joseph DeSchryver informed the medical executive committee of the plan Tuesday.

“We have not received anything official in writing or a date when this would start,” said Voge, who is not on the executive committee, “but I think it’s being presented by the administration as a done deal. It was announced as a sort of fait accompli. I can say that among the medical staff, I don’t know anyone who is not on board with opposing this.”

“It is my understanding,” Voge said, “that this is an initiative Tenet is taking at multiple hospitals in California — I think I heard 10 or 11 — lumping the three contracts together and giving them to a single management company to administer. That would save the hospitals money.”

If San Luis Hospitalists loses its contract with Sierra Vista, “We’d have to lay off people, and we’d have to look for other opportunities,” Voge said.

Voge said that typically, the national chains use their own physicians to fulfill the contracts and don’t subcontract to local medical practices.

“Anyone who wanted to work with them would have to resign their partnership and be employees with this management group,” he said. “We would basically have to apply for a job if we wanted to.”

Voge said that idea would be distasteful to his group.

“Our group is a local group,” he said. “We’ve been at both hospitals (French and Sierra Vista) for a number of years. Most of us have seen and a couple of our doctors have previously worked for these national chains and don’t want to do that again. We prefer local control and being able to make decisions.”

Voge voiced concerns both about the quality of physicians who are hired by a national chain and the disruption it would cause to patient care locally.

He said local physicians have a history of working together, creating a smoothly operating team that can be particularly important in emergency and surgical situations, for instance.

“It provides a work environment where everyone is comfortable and knows everyone’s level of competence,” he said.

At Coastal Anesthesiology Medical Associates, practice manager Carlyn Christianson said the 22-physician group also was notified of the Tenet plan. The medical group has a contract with Sierra Vista as well as French Hospital, Arroyo Grande hospital and three surgical centers.

“We found out about this Tuesday from Sierra Vista,” she said. “Their CEO told us directly.”

Christianson said the plan came from Tenet’s corporate office and not the local hospitals.

She also said her understanding was that Tenet had issued a request for proposals from national chains to provide anesthesia, emergency department and hospitalist services into a single contract with multiple California hospitals.

She said she would expect to have three to six months’ notice of a change in the contract.

Christianson said her medical group had been approached in the past by national companies to become employees. They declined.

“We’re really community-based physicians, and that’s one of the reasons we formed this group,” she said. “We like living and working on the Central Coast.”

Yukelson, the Sierra Vista spokesman, said he could not comment on any Tenet corporation actions but was not aware of any current changes.

He also said he would not comment directly on what Sierra Vista may or may not be considering but that the hospital, like all hospitals, is reviewing ways to cut costs and “physician alignment.”

“Any health care organization that says they’re not looking at alignment is being disingenuous,” he said. “It’s a different world today.”

In a related email, Yukelson noted, “In particular with the Affordable Care Act it is incumbent for every health care provider (hospitals, physicians, managed care, etc.) to seek ways to more closely align our clinical partners and drive unnecessary costs out of the system.”

Under health care reform, hospitals face a carrot-and-stick approach to improving care and controlling Medicare and Medicaid costs. The carrot can be rewards for lowering hospital readmissions, instituting electronic medical records and streamlining physician and hospital operations. The stick comes in lower per-service reimbursement rates.

Yukelson said Sierra Vista has had a long and positive relationship with local medical groups. While not confirming that any change is in the works, he said that if one were to occur, he hopes all doctors now providing services “remain in the community and we continue to work together.”

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If you're not going to join a major academic center (that is running lean and in the black) you should join the biggest group that you can. Of course big groups are not immune to a takeover, or loss of contracts if they cover multiple hospitals and centers.
And don't buy a home for at least a year or until partnership. That's a big anchor you don't want unless you plan to stay, and could add insult to injury when you dump it for a big loss.
 
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And don't buy a home for at least a year or until partnership. That's a big anchor you don't want unless you plan to stay, and could add insult to injury when you dump it for a big loss.

Solid advice ILD. I had a resident collegue build a 850K home right out of residency. Group lost the contract and he subsequently moved to another area.
House was built in 2008. He had to resell that house one brick at a time. Painful.
As tough as it sounds, try to resist the urge to buy a house right out of residency. Give yourself time to understand your group dynamics both internally and with administration. Partnership is never guarenteed.
 
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Agree. Agree. Agree.

I made a monstrous mistake and bought a house. I'm going to lose about $35k on that transaction... if and when it finally sells.
 
Agree. Agree. Agree.

I made a monstrous mistake and bought a house. I'm going to lose about $35k on that transaction... if and when it finally sells.

I bought a house and made 100k in a year, I wouldn't bet on that ever happening again though.
 
Why do these local groups refuse to be competitive against AMCs is beyond me.
 
Why do these local groups refuse to be competitive against AMCs is beyond me.

Is it refusing to do so or an inability to do so? The AMCs collect more money for the same patient care because they have better contract rates. The local group would have to pay their own physicians even less than the AMC pays physicians to compete with them.

Example of a 20 doc group. They might collect revenue of $12M per year and have expenses of $1M per year for $11M to spread between 20 docs (550 per). An AMC for the exact same hospital and level of work might collect $16M per year and have expenses of 800K per year. That means they have an extra $4.2M per year generated from the same level of work which they can either skim off the top for themselves or flow back to the hospital via increased level of service (having more than 20 MDs) or whatever they want.


What small groups really need to do is merge into bigger and bigger groups and have better negotiating power for their own contract rates and then it's better for everybody.
 
Interesting post about "Tenet Looks At Replacing Local EM & Anesthesiology Docs" on Sermo:https://mobile.sermo.com/posts/posts/222101

Doctors: Tenet Healthcare may end some local medical service contractsMedical groups say the owner of Sierra Vista and Twin Cities hospitals may contract with nationally based firms instead of local providers for some services

Already happened in Atlanta. No buyout - just pushed out.
 
Is it refusing to do so or an inability to do so? The AMCs collect more money for the same patient care because they have better contract rates. The local group would have to pay their own physicians even less than the AMC pays physicians to compete with them.

Example of a 20 doc group. They might collect revenue of $12M per year and have expenses of $1M per year for $11M to spread between 20 docs (550 per). An AMC for the exact same hospital and level of work might collect $16M per year and have expenses of 800K per year. That means they have an extra $4.2M per year generated from the same level of work which they can either skim off the top for themselves or flow back to the hospital via increased level of service (having more than 20 MDs) or whatever they want.


What small groups really need to do is merge into bigger and bigger groups and have better negotiating power for their own contract rates and then it's better for everybody.

That's probably very true but the internal economics of a group is irrelevant to the hospital CEO.

A CEO wants a service at a minimum price. Whether a group can provide that or not is what matters. As a CEO, it is irrelevant whether your anesthesiologist are making 150k or 500k as long as it doesn't come out of his budget.

What you are implying is that a small group is a failed model from the get go. Yes, basically it means that the partners need a pay cut. Possibly get even less than a well run AMC employee for reasons you have explained. But that's the "beauty" of being a partner in a small group. You get to make your own decisions, including how bad your salary will be, instead of being part of an "evil" AMC.
 
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What you are implying is that a small group is a failed model from the get go. Yes, basically it means that the partners need a pay cut. Possibly get even less than a well run AMC employee for reasons you have explained. But that's the "beauty" of being a partner in a small group. You get to make your own decisions, including how bad your salary will be, instead of being part of an "evil" AMC.

I don't disagree. It's hard for a mom and pop store to survive in an era of Walmart and other behemoths just as it's hard for a small private group to survive in this era of AMCs. You end up paying more there for the same product. Now it might be a slightly better version of the product and it might make you happy that you know the owner and they've lived in town for a long time, but when your own salary is getting tighter you might be more willing to shop at the superstore to get a cheaper price on the same product.
 
California is a different beast.

If those MDs are unified. They should all walk. These AMCs are counting on many docs to stay on staff after the take over.

All the MDs walk. Let the AMCs bring in their own people. Something bad will happen. Surgeons will get pissed. But the key is the local community response. There are games local MDs can play with the hospital.

I won't disclose the exact scenario. But they can put the hospital administrators out of jobs very quickly as a parting F U for making us lose our contract. There are ways to shut the ORs down. Make credentialing tougher for AMCs to move people in quickly.

Hurt the hospitals where it matters. Very simple. And very subtle.
 
A CEO wants a service at a minimum price.

Yes, but they don't want to compromise quality. That's like having their cake and eating it too. Fortunately (or unfortunately), anesthesia has become so safe that even with a monkey turning the dials it's pretty hard to have a catastrophe. Finesse and being slick? That's a different thing altogether and one that is not easily recognized or rewarded. That's why we have other B.S. stuff now like HCAHPS.
 
I think that group in San Louis Obispo is all MD, and, at least in the past, made far less than the 550k number per doc hypothesized in a post above. I assume they also get a subsidy. The subsidy would then be eliminated and a medical direction model implemented, I assume.
 
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Yes, but they don't want to compromise quality. That's like having their cake and eating it too. Fortunately (or unfortunately), anesthesia has become so safe that even with a monkey turning the dials it's pretty hard to have a catastrophe. Finesse and being slick? That's a different thing altogether and one that is not easily recognized or rewarded. That's why we have other B.S. stuff now like HCAHPS.
Just takes one bad outcome from new anesthesia staff. Outcomes will be magnified.

This has happened at least twice that I know of when all Md groups were replaced. Both times. Sentinel events with new staff from AMC. Surgeons freak out. Move cases. ORs shut down. Administrators lose jobs.

AMCs ask for more money. It becomes a revolving cycle and takes 2 years to stabilize.
 
Just takes one bad outcome from new anesthesia staff. Outcomes will be magnified.

This has happened at least twice that I know of when all Md groups were replaced. Both times. Sentinel events with new staff from AMC. Surgeons freak out. Move cases. ORs shut down. Administrators lose jobs.

AMCs ask for more money. It becomes a revolving cycle and takes 2 years to stabilize.
Doesn't seem to have hampered the growth of AMCs. They must be doing something right that private groups cannot achieve.
 
California is a different beast.

If those MDs are unified. They should all walk. These AMCs are counting on many docs to stay on staff after the take over.

All the MDs walk. Let the AMCs bring in their own people. Something bad will happen. Surgeons will get pissed. But the key is the local community response. There are games local MDs can play with the hospital.

I won't disclose the exact scenario. But they can put the hospital administrators out of jobs very quickly as a parting F U for making us lose our contract. There are ways to shut the ORs down. Make credentialing tougher for AMCs to move people in quickly.

Hurt the hospitals where it matters. Very simple. And very subtle.
I don't think the community gives a crap to tell you the truth. People do what is best for them individually. A lot of the displaced partners will take the job because of family constraints and the fact that groups are disappearing. It's either AMC here or AMC there.
 
I don't think the community gives a crap to tell you the truth. People do what is best for them individually. A lot of the displaced partners will take the job because of family constraints and the fact that groups are disappearing. It's either AMC here or AMC there.

Depends on the community.

Yes the key is the AMC is counting on MDs not leaving. In the two cases I know. 10 out of 14 MDs split and left. Hospital was in chaos. They ending up giving all MD group back contract within 1 year and even bigger guarantee. Because they had to shut Down ORs.

Other place fired administrator within 6 months. AMC sill there. Another administrator fired 1 year later as well. They finally stabilized the place after 2 years and had to raise their salary offer by at least $100k. Because partners were making $500-550k and they tried to come in at $300k.
 
Depends on the community.

Yes the key is the AMC is counting on MDs not leaving. In the two cases I know. 10 out of 14 MDs split and left. Hospital was in chaos. They ending up giving all MD group back contract within 1 year and even bigger guarantee. Because they had to shut Down ORs.

Other place fired administrator within 6 months. AMC sill there. Another administrator fired 1 year later as well. They finally stabilized the place after 2 years and had to raise their salary offer by at least $100k. Because partners were making $500-550k and they tried to come in at $300k.
That's good news.

I wonder if the place is in the bundocs. I'm sure there are 10 guys in line outside the hospital right now waiting for my current job.
 
That's good news.

I wonder if the place is in the bundocs. I'm sure there are 10 guys in line outside the hospital right now waiting for my current job.
One with population area around between 200-500K people and the other about between 400-800K people. smaller and mid size areas.

But it doesn't matter the location. What matters is turnover. Even in a hospital base group W2 employee model. When 10 anesthesiologist out of 30 threaten to leave, it causes destabilization. This happened in mid atlantic area. In the end the W2 MD's ended up with $50-100K pay raises. OT hours plus call stipend.

What this means is physician unity. An AMC is counting on most of the people staying. You just can't come in and replace all 14 MD's and expect everything to be rosy. Surgeon's opinions matter a lot to hospital administration. If they aren't and start pulling cases out. Hospital loses revenue very quickly.
 
It is interesting that the local groups haven't bothered to discuss the possible reasons why Tenet would even consider this change and what they have preemptively done to head it off. Hospital leaders recognize the amount of disruption that changing contracted groups can cause in terms of continued service delivery, deteriorating relationships, and general overall turmoil. Nevertheless, Tenet apparently feels that making a change, or at least publicly discussing it now, is worth the price. If everything is peachy-keen in California and with the level of service these groups are providing why does Tenet pursue it? Yes, we all think it is all about the money and it probably is. However, that is what happens in a market economy: one puts their best pricing/service combination out on the table and the market drives the process.

As for surgeon and medical staff support, if someone ever wants to throw a grenade into the fight with anesthesiologists just let the surgeons and other medical staff members know the general income level of anesthesiologists and CRNAs. Surgeon support can evaporate instantly when they learn they are being asked to support a group that is making far more than they do when they consider themselves as the revenue drivers of the hospital.

Also, there is a bit of irony in this discussion from what I understand from the news postings on other sites (Kevin MD I think). It appears that several of the EM groups who are in the same situation with Tenet are part of CEP (California Emergency Physicians) which takes over contracts from local ED groups in many other states and is a physician management company in the ED/hospital business in its own right. Apparently it is ok for them to take contracts away from other local groups but not for them to lose any contracts to other regional or national companies. Its an interesting philosophy in my opinion.
 
The Affordable Care Act encourages a unified billing process.

It's all Obama's fault. That's the selling point these AMCs present to hospitals.

If X hospital system uses the Same X AMCs. Than the ACA rewards systems for more integrated billing process. (In theory).

What makes me wonder. It's just easier
hospitals to take over anesthesia and bring them "in house" and just cut out the middle guys.
 
At least in California, it is illegal for hospitals to directly employ physicians.
 
Interesting post about "Tenet Looks At Replacing Local EM & Anesthesiology Docs" on Sermo:https://mobile.sermo.com/posts/posts/222101

Doctors: Tenet Healthcare may end some local medical service contractsMedical groups say the owner of Sierra Vista and Twin Cities hospitals may contract with nationally based firms instead of local providers for some services

BY JANET LAVELLE

[email protected]

June 1, 2014

Physicians at Sierra Vista Regional Medical Center have been notified that Tenet Healthcare Corp., the hospital’s owner, may contract with a national company to provide some medical services.

The plan would affect Sierra Vista in San Luis Obispo, Twin Cities Community Hospital in Templeton and an unknown number of other Tenet-owned hospitals in California.

According to several sources, Tenet is considering ending contracts with local medical groups providing anesthesiology, emergency department and hospitalist care. Tenet would contract with a single national company to provide those services at a lower rate to some or all Tenet hospitals in California, several physicians told The Tribune.

Tenet, a for-profit company based in Dallas, owns 77 hospitals nationwide including 11 in California, according to its website.

Officials at both Sierra Vista and Twin Cities declined to comment on the plan in specifics.

Sierra Vista spokesman Ron Yukelson said the hospital, like all hospitals, is reviewing costs.

A spokeswoman at Twin Cities referred all questions to Sierra Vista officials last week.

Tenet corporate spokeswoman Ellen Beth Levitt said Friday she didn’t know anything about the matter.

But the executive committee of the Sierra Vista medical staff was informed of the plan Tuesday, chief of staff Dr. William Sogaard confirmed.

In response, the committee, which represents the 400 physicians who use the hospital, held an emergency meeting and took a position opposing the plan, he said.

“It’s certainly an unprecedented occurrence in my personal experience and probably with everyone else on staff,” Sogaard said Friday. “Our stance is we are opposed to it, but beyond that I would like to talk to our attorney before making any further comment.”

Sogaard is a partner in San Luis Hospitalists, an 11-physician medical group with contracts to provide in-hospital physician services to Sierra Vista, as well as to Dignity Health-owned French Hospital Medical Center in San Luis Obispo and Arroyo Grande Community Hospital.

Dr. Christian Voge also is a partner in the hospitalist group, which is physician-owned. He was told that Sierra Vista CEO Joseph DeSchryver informed the medical executive committee of the plan Tuesday.

“We have not received anything official in writing or a date when this would start,” said Voge, who is not on the executive committee, “but I think it’s being presented by the administration as a done deal. It was announced as a sort of fait accompli. I can say that among the medical staff, I don’t know anyone who is not on board with opposing this.”

“It is my understanding,” Voge said, “that this is an initiative Tenet is taking at multiple hospitals in California — I think I heard 10 or 11 — lumping the three contracts together and giving them to a single management company to administer. That would save the hospitals money.”

If San Luis Hospitalists loses its contract with Sierra Vista, “We’d have to lay off people, and we’d have to look for other opportunities,” Voge said.

Voge said that typically, the national chains use their own physicians to fulfill the contracts and don’t subcontract to local medical practices.

“Anyone who wanted to work with them would have to resign their partnership and be employees with this management group,” he said. “We would basically have to apply for a job if we wanted to.”

Voge said that idea would be distasteful to his group.

“Our group is a local group,” he said. “We’ve been at both hospitals (French and Sierra Vista) for a number of years. Most of us have seen and a couple of our doctors have previously worked for these national chains and don’t want to do that again. We prefer local control and being able to make decisions.”

Voge voiced concerns both about the quality of physicians who are hired by a national chain and the disruption it would cause to patient care locally.

He said local physicians have a history of working together, creating a smoothly operating team that can be particularly important in emergency and surgical situations, for instance.

“It provides a work environment where everyone is comfortable and knows everyone’s level of competence,” he said.

At Coastal Anesthesiology Medical Associates, practice manager Carlyn Christianson said the 22-physician group also was notified of the Tenet plan. The medical group has a contract with Sierra Vista as well as French Hospital, Arroyo Grande hospital and three surgical centers.

“We found out about this Tuesday from Sierra Vista,” she said. “Their CEO told us directly.”

Christianson said the plan came from Tenet’s corporate office and not the local hospitals.

She also said her understanding was that Tenet had issued a request for proposals from national chains to provide anesthesia, emergency department and hospitalist services into a single contract with multiple California hospitals.

She said she would expect to have three to six months’ notice of a change in the contract.

Christianson said her medical group had been approached in the past by national companies to become employees. They declined.

“We’re really community-based physicians, and that’s one of the reasons we formed this group,” she said. “We like living and working on the Central Coast.”

Yukelson, the Sierra Vista spokesman, said he could not comment on any Tenet corporation actions but was not aware of any current changes.

He also said he would not comment directly on what Sierra Vista may or may not be considering but that the hospital, like all hospitals, is reviewing ways to cut costs and “physician alignment.”

“Any health care organization that says they’re not looking at alignment is being disingenuous,” he said. “It’s a different world today.”

In a related email, Yukelson noted, “In particular with the Affordable Care Act it is incumbent for every health care provider (hospitals, physicians, managed care, etc.) to seek ways to more closely align our clinical partners and drive unnecessary costs out of the system.”

Under health care reform, hospitals face a carrot-and-stick approach to improving care and controlling Medicare and Medicaid costs. The carrot can be rewards for lowering hospital readmissions, instituting electronic medical records and streamlining physician and hospital operations. The stick comes in lower per-service reimbursement rates.

Yukelson said Sierra Vista has had a long and positive relationship with local medical groups. While not confirming that any change is in the works, he said that if one were to occur, he hopes all doctors now providing services “remain in the community and we continue to work together.”
:barf:
 
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