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[toughlife]

Pros and Cons of Exclusive Contracts

Karin Bierstein, J.D., M.P.H.
Associate Director of ASA Professional Affairs


http://www.asahq.org/Newsletters/2006/08-06/pm0706.pdf

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[UTSouthwestern]

Pros and Cons of Exclusive Contracts

Karin Bierstein, J.D., M.P.H.
Associate Director of ASA Professional Affairs


http://www.asahq.org/Newsletters/2006/08-06/pm0706.pdf

I've been preaching against exclusive contracts for quite a while. Even at the most posh facilities in Dallas, it is highly undesirable to have an exclusive contract because of the coverage issues.

Find the surgeons you like to work with and the ones that can provide you with good cases and stick with them. They can get you into a hospital to practice even if there is an exclusive contract held by another group.

 

[militarymd]

I've been preaching against exclusive contracts for quite a while. Even at the most posh facilities in Dallas, it is highly undesirable to have an exclusive contract because of the coverage issues.

Find the surgeons you like to work with and the ones that can provide you with good cases and stick with them. They can get you into a hospital to practice even if there is an exclusive contract held by another group.

UT,

This only works if the insurance companies pay enough per unit that you can generate enough revenue without a subsidy.

As for negotiating better rates.....that's a whole other 5 page thread.

 

[UTSouthwestern]

UT,

This only works if the insurance companies pay enough per unit that you can generate enough revenue without a subsidy.

As for negotiating better rates.....that's a whole other 5 page thread.

We've had this discussion before. For the majority of groups in Dallas, it works and I think it is because so many groups do NOT have exclusive contracts with hospitals. Because of that, we leave the insurance companies little choice but to negotiate fairly with us. We have dropped insurance companies that have lowered our rates without cause. If our surgeons then take a patient that has that companies insurance, we bill the crap out of them (read full price) and turn our billing company loose on them.

 

[johankriek]

UT,

This only works if the insurance companies pay enough per unit that you can generate enough revenue without a subsidy.

As for negotiating better rates.....that's a whole other 5 page thread.

there is no need for a subsidy if you are not taking call and doing intubations on the floor and doing all this extra stuff for the hospital..

Im completely against excusive contracts and anyone who becomes an employee of a situation like this beware. It completely takes away any autonomy you have.. I moved across the country to get away from the 210K per year 4 weeks vacation nonsense... work you to the bone.. NO thanks... and i suppose if more and more graduates express desire to do their OWN cases on their terms , as i think they will, exclusive contracts will fall apart because of staffing... they will have to open it up.. My two cents... good job tough for bringing this issue up.. one of the more important issues facing how you will practice in the fuure
JK

 

[militarymd]

By having an exclusinve contract, my income almost tripled, and I don't have to travel from hospital to hospital.

It really depends on the type of exclusive contract....for those who are NOT in the know, exclusive contracts may sound bad, but if you negotiate properly, it can be a good thing.

 

[UTSouthwestern]

By having an exclusinve contract, my income almost tripled, and I don't have to travel from hospital to hospital.

It really depends on the type of exclusive contract....for those who are NOT in the know, exclusive contracts may sound bad, but if you negotiate properly, it can be a good thing.

I can see it working with a CRNA model, but on a per hour basis, you are making less. Two groups in Dallas that make good income (read $500K+), work almost twice as many hours than the non-exclusive groups making comparable income and also take more in house overnight call.

Different situations of course can impact your decision to go with exclusive contracts. Location, presence/absence of competition, willingness to travel, etc. Make the best decision for you. Mil has, Jet and Noy have, and I believe I have.

 

[johankriek]

By having an exclusinve contract, my income almost tripled, and I don't have to travel from hospital to hospital.

It really depends on the type of exclusive contract....for those who are NOT in the know, exclusive contracts may sound bad, but if you negotiate properly, it can be a good thing.

its bad altogether.. the hospital always has a clause in there to get rid of the group altogehter.. you are at their mercy... if you are on staff just providing aneshtesia services without a contract .. you are NOt their bitch... you come and go as you please.. which is what i do out here.. I provide top notch anesthesia care to patients that im consulted for.. and i bill for my services.. if ido take call.. which i do on occasion.. they provide me a stipend for the day or night.. and i keep the billing......... there is a guy in charge in each of the places i go to.. he does the same thing i do.. he gets an administrative stipend.. nothing i wanna be involved in... The only way the hospital can get rid of me ... is peer review..saying Im terrible... or giving an exclusive contract to an anesthesia group (never gonna happen here)... but i would still have priveleges.. just wouldnt have patients..(never gonna hapen)
dont get involved in employee situations with hospitals.. my advice...

 

[militarymd]

its bad altogether.. the hospital always has a clause in there to get rid of the group altogehter.. you are at their mercy... if you are on staff just providing aneshtesia services without a contract .. you are NOt their bitch... you come and go as you please.. which is what i do out here.. I provide top notch anesthesia care to patients that im consulted for.. and i bill for my services.. if ido take call.. which i do on occasion.. they provide me a stipend for the day or night.. and i keep the billing......... there is a guy in charge in each of the places i go to.. he does the same thing i do.. he gets an administrative stipend.. nothing i wanna be involved in... The only way the hospital can get rid of me ... is peer review..saying Im terrible... or giving an exclusive contract to an anesthesia group (never gonna happen here)... but i would still have priveleges.. just wouldnt have patients..(never gonna hapen)
dont get involved in employee situations with hospitals.. my advice...

Your understanding of exclusive contracts is flawed.
1) you are not an employee of the hospital...you have a contract which EXCLUDES other people
2) hospital can't FIRE you...if they take away the contract...it just means other people like you can come to provide services
3) and if I/we do our jobs right...when/if the contract goes away, none of the surgeons will want to use people like you
4) depending on which area of the country and what insurance companies pay...billing for your services pays peanuts...ie medicare/mediaid/poor paying blue cross

5) no matter what...hospitals can get rid of you if they want....politics...your paperwork gets lost, that letter you mailed never arrived....don't think for a moment that if the admiinistration wants you gone that you won't be gone....contract/no contract or whatever....peer review/no peer review

 

[johankriek]

Your understanding of exclusive contracts is flawed.
1) you are not an employee of the hospital...you have a contract which EXCLUDES other people

Im talking about a situation where you are employed by the group who has an exclusive contract with the hospital. some of the hospitals in a desirable area wil have exclusive contracts with anesthesia groups for control purposes. the anesthesia group in said hospital will offer you an employee contract that makes you their indentured servant for a period of time before they let you in to make real money. you are an EMPLOYEE of the group.... thats not something you want. stay away from that arrangement. and in some areas you cannot stay away from that in which point you move out of that area and find another area..

 

[militarymd]

dont get involved in employee situations with hospitals.. my advice...

What you said there is different from what you are saying now.

In the above you are saying that you should not be employee's of the hospital....now you're saying don't be an employee of an anesthesia group.

That's 2 very different and distinct entities in anesthesia practices.

Both has it's pros and cons...and whether it benefits a new grad is totally based on what the contracts stipulate.

Just for the readers out there, I'm almost 100% sure that the vast majority of jobs out there start you as an employee of an anesthesia group.

UT was an employee of a group...but his group does not have a contract with the hospital.

 

[johankriek]

What you said there is different from what you are saying now.

In the above you are saying that you should not be employee's of the hospital....now you're saying don't be an employee of an anesthesia group.

That's 2 very different and distinct entities in anesthesia practices.

Both has it's pros and cons...and whether it benefits a new grad is totally based on what the contracts stipulate.

Just for the readers out there, I'm almost 100% sure that the vast majority of jobs out there start you as an employee of an anesthesia group.

UT was an employee of a group...but his group does not have a contract with the hospital.

let me make myself clearer

dont get involved in any situation where you are someone''s em ployee... whether it's an anesthesia group or even worse a hospital.. If you do... dont complain if you are being taken advantage of.. ..

 

[militarymd]

let me make myself clearer

dont get involved in any situation where you are someone''s em ployee... whether it's an anesthesia group or even worse a hospital.. If you do... dont complain if you are being taken advantage of.. ..

Why are we talking about employment status here?

I thought this thread is about exclusive anesthesia contracts?

BTW, johankriek, what was your previous username?

 

[HomerSimpson]

Complex issue:

I like exclusive contracts because it provides more control over coverage at the hospital.

Example: If Dr. X all of a sudden posts an "emergency" butt lift at 8:48 A.M. and you have no one available until 10:00. Then as Dr. X's anesthesia group it is your responsiblity to find coverage. Dr. X gets very pissed off and threatens to go elsewhere "you're picking on me again" wah wah wah. Of course then there is the stress of losing this surgeon to a competing group in hte same hospital. Exclusive contracts serve the hospital not the surgeon. Therefore in above same situation Dr. X will have to wait,because there is no other group. If he doesn't like it then he can take his business to another hospital, which is much less likely than him changing anesthesia groups.

I do not like exclusive contracts because of the control issues you all have mentioned. e.g. call duties, insurance contracts and of course payer base.

Example: The hospital decides to change its philosophy. Such as becoming a level one trauma center or opening a free clinic or starting an indigent care insurance program to help the poor in the are. All good causes for the public health but bad news for your group. Speaking of the level one status, Hospitals get huge subsidies to become them. Do you think that you'll see any of that money? maybe, but remember you have an exclusive with the hospital they kind of got you by the b's. therefore you are obligated by whatever contract you signed to perform whatever anesthesia services the hospital asks you for.

like i said complex. I'm just scratching the surface I BET.

 

[Laryngospasm]

Complex issue:

I like exclusive contracts because it provides more control over coverage at the hospital.

Example: If Dr. X all of a sudden posts an "emergency" butt lift at 8:48 A.M. and you have no one available until 10:00. Then as Dr. X's anesthesia group it is your responsiblity to find coverage. Dr. X gets very pissed off and threatens to go elsewhere "you're picking on me again" wah wah wah. Of course then there is the stress of losing this surgeon to a competing group in hte same hospital. Exclusive contracts serve the hospital not the surgeon. Therefore in above same situation Dr. X will have to wait,because there is no other group. If he doesn't like it then he can take his business to another hospital, which is much less likely than him changing anesthesia groups.

I do not like exclusive contracts because of the control issues you all have mentioned. e.g. call duties, insurance contracts and of course payer base.

Example: The hospital decides to change its philosophy. Such as becoming a level one trauma center or opening a free clinic or starting an indigent care insurance program to help the poor in the are. All good causes for the public health but bad news for your group. Speaking of the level one status, Hospitals get huge subsidies to become them. Do you think that you'll see any of that money? maybe, but remember you have an exclusive with the hospital they kind of got you by the b's. therefore you are obligated by whatever contract you signed to perform whatever anesthesia services the hospital asks you for.

like i said complex. I'm just scratching the surface I BET.

There is always renegotiating, I know it can be done, the group that I am with just did it, much to the benefit of the anesthesiologists.

 

[pmichaelmd]

What you said there is different from what you are saying now.

In the above you are saying that you should not be employee's of the hospital....now you're saying don't be an employee of an anesthesia group.

That's 2 very different and distinct entities in anesthesia practices.

Both has it's pros and cons...and whether it benefits a new grad is totally based on what the contracts stipulate.

Just for the readers out there, I'm almost 100% sure that the vast majority of jobs out there start you as an employee of an anesthesia group.

UT was an employee of a group...but his group does not have a contract with the hospital.

Can somebody clear this up a little more? As a coming graduate, most of the groups I've looked at start you as an employee. Some of them have exclusive contracts with a hospital, others diversify and cover some surgicenters, etc. Even as an employee, the offers I'm hearing at interviews seem relatively generous. Is it still bad to be an employee (I guess that reads as somebodies' beeatch) if the offer is somewhat decent? By decent I mean starting off between $260-$400k/year, 5-8 weeks vacation, q6 to q9 call. My question isn't meant to be about numbers, but I'm wondering it an employee in the above situation is still likely to get screwed? I don't really want to bend over and take it in 10 months.

Thanks for all of the helpful advise!!

PMMD

 

[militarymd]

Can somebody clear this up a little more? As a coming graduate, most of the groups I've looked at start you as an employee. Some of them have exclusive contracts with a hospital, others diversify and cover some surgicenters, etc. Even as an employee, the offers I'm hearing at interviews seem relatively generous. Is it still bad to be an employee (I guess that reads as somebodies' beeatch) if the offer is somewhat decent? By decent I mean starting off between $260-$400k/year, 5-8 weeks vacation, q6 to q9 call. My question isn't meant to be about numbers, but I'm wondering it an employee in the above situation is still likely to get screwed? I don't really want to bend over and take it in 10 months.

Thanks for all of the helpful advise!!

PMMD

No matter which route you choose....as a newbie...you're going to get some screwing....that's life....the idea is to minimize it as much as possible...that's why you need to research the group....meet the partners....talk to people about the group...etc. etc. etc....

One of my new partner's called around my town asking about me before joining...I'm glad he did....I now know he is a thorough guy...and he knows I'm a stand up guy.


There will always be those who don't do well in groups....there are certain personalities out there that just aren't team players....if you don't want to be part of a team...that's fine...but personally, I like having partners that is going to help me when I have problems...

One of the guys I fired has a personality disorder....he just can't get along with ANYONE...the size of his ego prevents the patient and the surgeon from getting into the OR....he's doing solo contracts now...where he bills for his services......I know he is making a fraction of what he could have made here...but that's life.

 

[HomerSimpson]

Can somebody clear this up a little more? As a coming graduate, most of the groups I've looked at start you as an employee. Some of them have exclusive contracts with a hospital, others diversify and cover some surgicenters, etc. Even as an employee, the offers I'm hearing at interviews seem relatively generous. Is it still bad to be an employee (I guess that reads as somebodies' beeatch) if the offer is somewhat decent? By decent I mean starting off between $260-$400k/year, 5-8 weeks vacation, q6 to q9 call. My question isn't meant to be about numbers, but I'm wondering it an employee in the above situation is still likely to get screwed? I don't really want to bend over and take it in 10 months.

Thanks for all of the helpful advise!!

PMMD

Depends


Most jobs in anesthesia groups start you off in a partnership track. Therefore you are an employee for a set number of years. During this time yes they do make you work for less, sometimes significantly less with the promise that this "buy-in" will lead to shareholder status. Most group practices work this way. I think truly it's a mistake to take an offer straight from a hospital as an employee. These offers are around. Sometimes for huge $$$. You will be relinquishing a lot of control or getting into a bad situation. I have an example

A hospital in the area I live in started it's own "group". They were hired for the sole purpose of forcing the existing private guys out. They were starting guys over $400k/yr + benefits depending on experience. After they finally forced them out salaries and work schedules "changed" But guys were under contract for a few years. So either they had to move out of the city to avoid the non-compete or stay there and eat it.

So be careful out there do research etc.

 

[UTSouthwestern]

Depends


Most jobs in anesthesia groups start you off in a partnership track. Therefore you are an employee for a set number of years. During this time yes they do make you work for less, sometimes significantly less with the promise that this "buy-in" will lead to shareholder status. Most group practices work this way. I think truly it's a mistake to take an offer straight from a hospital as an employee. These offers are around. Sometimes for huge $$$. You will be relinquishing a lot of control or getting into a bad situation. I have an example

A hospital in the area I live in started it's own "group". They were hired for the sole purpose of forcing the existing private guys out. They were starting guys over $400k/yr + benefits depending on experience. After they finally forced them out salaries and work schedules "changed" But guys were under contract for a few years. So either they had to move out of the city to avoid the non-compete or stay there and eat it.

So be careful out there do research etc.

Now which hospital would that be? Garland? Methodist?

 

[johankriek]

Can somebody clear this up a little more? As a coming graduate, most of the groups I've looked at start you as an employee. Some of them have exclusive contracts with a hospital, others diversify and cover some surgicenters, etc. Even as an employee, the offers I'm hearing at interviews seem relatively generous. Is it still bad to be an employee (I guess that reads as somebodies' beeatch) if the offer is somewhat decent? By decent I mean starting off between $260-$400k/year, 5-8 weeks vacation, q6 to q9 call. My question isn't meant to be about numbers, but I'm wondering it an employee in the above situation is still likely to get screwed? I don't really want to bend over and take it in 10 months.

Thanks for all of the helpful advise!!

PMMD

Johan here,

never had a previous name militarymd..

Listen, anesthesia groups (mom and pop operations; one group covers one hospital want to maximize their income.. So it behooves them to have as many employees as possible and as little partners as possible. they pay you a salary of 260-300.. they make prolly 600K from you.. and they profit 200 from your services.. They tell you that in 3 years you will be a partner.. Why 3 years? Anesthesia is a service busines. nobody builds a practice in anesthesia.. they are all the surgeons patients... so no referral practice was built.. so NEver ever accept this.. If you are comfortable with that arrangement.. go for it.. join them.. I was never comfortable .. so i never joined and never ever will join an arrangement like this.. But if you do join this.. ask them to see the books, and talk to the accountant.. and ask them to see the contract they have with the hospital.. My guess after you ask those 3 questions.. they will say.. hey listen we found someone else..
start locuming when you graduate.. make some money

 

[toughlife]

Johan here,

never had a previous name militarymd..

Listen, anesthesia groups (mom and pop operations; one group covers one hospital want to maximize their income.. So it behooves them to have as many employees as possible and as little partners as possible. they pay you a salary of 260-300.. they make prolly 600K from you.. and they profit 200 from your services.. They tell you that in 3 years you will be a partner.. Why 3 years? Anesthesia is a service busines. nobody builds a practice in anesthesia.. they are all the surgeons patients... so no referral practice was built.. so NEver ever accept this.. If you are comfortable with that arrangement.. go for it.. join them.. I was never comfortable .. so i never joined and never ever will join an arrangement like this.. But if you do join this.. ask them to see the books, and talk to the accountant.. and ask them to see the contract they have with the hospital.. My guess after you ask those 3 questions.. they will say.. hey listen we found someone else..
start locuming when you graduate.. make some money

Word.


I like that idea. Why let someone else make money off your hard labor? I will either do locums or go the pain route and be my own jefe. Screw breaking my back to make another beotch rich.

 

[militarymd]

So come on....new attendings....what are you guys doing?

 

[militarymd]

Word.


I like that idea. Why let someone else make money off your hard labor? I will either do locums or go the pain route and be my own jefe. Screw breaking my back to make another beotch rich.

As a new Pain attending...how do you plan on financing your new office?

Guess what....either take a huge loan and be a "beotch" for the bank...or become an employee of a pain group.

 

[pmichaelmd]

Sounds like it'll be "interesting" as I go through the interview process. I will do all I can to guard my six, but I htink it'll really end up depending on how much of a good feeling I get about the practice and what kinds of good things the newer group members have to say when away from the senior partners.

Thanks again, guys. I can't believe that we're 10 months away!

Regards,
PMMD

 

[toughlife]

As a new Pain attending...how do you plan on financing your new office?

Guess what....either take a huge loan and be a "beotch" for the bank...or become an employee of a pain group.

I'd start doing locum tenens 2-3 days a week to subsidize my practice until I build a pt base. It'll probably take me like 6-12 months of being in the red but it is doable , but I think it'd be worth it.

 

[militarymd]

I'd start doing locum tenens 2-3 days a week to subsidize my practice until I build a pt base. It'll probably take me like 6-12 months of being in the red but it is doable , but I think it'd be worth it.

So you're going to work locum tenems 2 to 3 days a week......Are there LT contracts out there that allow you to work parts of the week? Someone who knows better can answer, but contracts that I'm aware of....keep you for several weeks/months at a time.

So say, you find this LT contract that lets you work 2 or 3 days a week....you're going to take that money to pay for your office?

When you start an office, the office is full time....ie you really can't rent it just for 2 or 3 days a week...your lease is full time.....Who's going to pay for your office staff? Office staffs don't just work 2 or 3 days a week.....You may use them only 2 or 3 days a week, but they will expect to be paid a full time salary.....if you don't pay as such...you will likely have pretty crappy office staff....which will make it next to impossible for you to build a practice.

The days of going out and hanging out a shingle and living large don't exist like they use to.

 

[Laryngospasm]

I'd start doing locum tenens 2-3 days a week to subsidize my practice until I build a pt base. It'll probably take me like 6-12 months of being in the red but it is doable , but I think it'd be worth it.

So do you expect to pay off your loan you got to start your practice in 6-12 mos? I think that is not what you mean, but to some that might be a misleading statement. I should also state that I hope you plan to buy used equipment, because a new c-arm costs about 150,000$

 

[toughlife]

So you're going to work locum tenems 2 to 3 days a week......Are there LT contracts out there that allow you to work parts of the week? Someone who knows better can answer, but contracts that I'm aware of....keep you for several weeks/months at a time.

So say, you find this LT contract that lets you work 2 or 3 days a week....you're going to take that money to pay for your office?

When you start an office, the office is full time....ie you really can't rent it just for 2 or 3 days a week...your lease is full time.....Who's going to pay for your office staff? Office staffs don't just work 2 or 3 days a week.....You may use them only 2 or 3 days a week, but they will expect to be paid a full time salary.....if you don't pay as such...you will likely have pretty crappy office staff....which will make it next to impossible for you to build a practice.

The days of going out and hanging out a shingle and living large don't exist like they use to.

What if I tell you that I know people who are doing just that as we debate the topic? Would it then seem too unrealistic?

 

[militarymd]

What if I tell you that I know people who are doing just that as we debate the topic? Would it then seem too unrealistic?

Tell us the details....because I would really like to know how they are swinging it.

Debt
cash flow
type of LT contract
location of practice....

 

[toughlife]

So do you expect to pay off your loan you got to start your practice in 6-12 mos? I think that is not what you mean, but to some that might be a misleading statement. I should also state that I hope you plan to buy used equipment, because a new c-arm costs about 150,000$

I said that it would take about that length of time to build a pt base and achieve a self-sustaining practice. You're right about the C-arms. They are expensive.

 

[toughlife]

Tell us the details....because I would really like to know how they are swinging it.

Debt
cash flow
type of LT contract
location of practice....

I will in the private forum after I go for some DQ ice cream with the wife.