american anesthesiology/mednax

[1strunnerup]

Alright, so what do people know? It seems like there are lots of groups out there being courted by american/sheridan type groups. I'm mostly interested to hear the opinions of those that have gone through the process. What do you wish you had done? What should you have asked before signing on the line? Any regrets? What are the best aspects versus independent practice? Do they make life easier? How did your group manage the transition? Has your work life changed for better or worse? As we see medicine changing right before our eyes it doesn't seem like there is a clear cut answer, but going with one of these groups doesn't seem appealing either. If you've been through it I'd appreciate your input.

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[PainDrain]

Sounds to be like you are, or your group is, trying to decide about selling out to an anesthesia management company. You have one simple question to ask yourself: do I like my profession and want to help it survive in an age of alarming decline and multiple threats OR do I want to sell out, screw over the junior staff who were hoping to find a decent future in your group, and take a big check over morals?


I love money as much as the next guy and I would love more of it to play with but I sure as hell wouldn't sell out and screw over, not only junior staff, but my profession to do it. Call me crazy but I will sleep soundly at night.

 

[caligas]

But if you dont sell you may lose your hospital contract to them anyway when it comes up for renewal, especially if your group gets a big stipend.

 

[Planktonmd]

At this point the private groups are 4 kinds:
1- Already sold
2- In the process of selling
3- Wanting to sell just waiting for the right price
4- Wanting to sell but unable and about to lose contract

 

[deleted126335]

At this point the private groups are 4 kinds:
1- Already sold
2- In the process of selling
3- Wanting to sell just waiting for the right price
4- Wanting to sell but unable and about to lose contract

There are still a few larger well trained groups deep in sub specialists, in smaller cities that are holding out.

 

[Arch Guillotti]

But if you dont sell you may lose your hospital contract to them anyway when it comes up for renewal, especially if your group gets a big stipend.

This is a good point unfortunately.

 

[Arch Guillotti]

There are still a few larger well trained groups deep in sub specialists, in smaller cities that are holding out.

A few others as well.

 

[BLADEMDA]

Sounds to be like you are, or your group is, trying to decide about selling out to an anesthesia management company. You have one simple question to ask yourself: do I like my profession and want to help it survive in an age of alarming decline and multiple threats OR do I want to sell out, screw over the junior staff who were hoping to find a decent future in your group, and take a big check over morals?


I love money as much as the next guy and I would love more of it to play with but I sure as hell wouldn't sell out and screw over, not only junior staff, but my profession to do it. Call me crazy but I will sleep soundly at night.

You are extremely naive on this issue. I have seen groups extinguished overnight by hospital administrators. The CEO/COO walks into the O.R. and informs the Anesthesia staff that AMC XYZ has been given the contract. The current group has 60-90 days to either find new jobs or join the AMC. How often has this happened? I know of at least 2 instances in the past 24 months in my State where this occurred. Both times the groups were surprised by the decision and both times they got ZERO.

If the group receives a subsidy over $500-$700K it is at risk of being taken over by an AMC. The group members are keenly aware of either rolling the dice on the CEO (bad idea) or selling out to an AMC with reasonable terms. If the group does NOT receive a subsidy then the situation is very different and the sale to an AMC is by no means "forced" in this current economic climate.

This isn't about the future for some groups as they have no future with predatory AMCs willing to take contracts without subsidies. Future graduates aren't being "hurt" by the sale to AMCs if in fact, that group would have been phased out anyway in a few years. The profession will survive but it won't ever be the same again.

Don't hate the player hate the game.

 

[BLADEMDA]

 

[Arch Guillotti]

http://cdn.meme.am/instances/500x/57242780.jpg

 

[PainDrain]

BLADE. I am not niave, I know the risk but have some friggin b@lls and some morals. If you have a decent contract and good lawyers in your corner then a hospital can't just void a contract without cause. Now if a contract is up for renewal then obviously it's fair game but to simply have an administrator stroll in and void a legal document is unlikely. In my region contracts are three to five years, heard of one being ten years. If your group is up for renewal obviously you see it coming.

 

[nimbus]

BLADE. I am not niave, I know the risk but have some friggin b@lls and some morals. If you have a decent contract and good lawyers in your corner then a hospital can't just void a contract without cause. Now if a contract is up for renewal then obviously it's fair game but to simply have an administrator stroll in and void a legal document is unlikely. In my region contracts are three to five years, heard of one being ten years. If your group is up for renewal obviously you see it coming.

3 years is a very short time. Those contract renewals come up incredibly fast.

 

[deleted126335]

BLADE. I am not niave, I know the risk but have some friggin b@lls and some morals. If you have a decent contract and good lawyers in your corner then a hospital can't just void a contract without cause. Now if a contract is up for renewal then obviously it's fair game but to simply have an administrator stroll in and void a legal document is unlikely. In my region contracts are three to five years, heard of one being ten years. If your group is up for renewal obviously you see it coming.

Contracts usually renew every few years. Terminate without cause clauses are also very common and completely "legal".

 

[BLADEMDA]

BLADE. I am not niave, I know the risk but have some friggin b@lls and some morals. If you have a decent contract and good lawyers in your corner then a hospital can't just void a contract without cause. Now if a contract is up for renewal then obviously it's fair game but to simply have an administrator stroll in and void a legal document is unlikely. In my region contracts are three to five years, heard of one being ten years. If your group is up for renewal obviously you see it coming.

So, you prefer that 6 months prior to the contract renewal the CEO gets bids from AMCs while discussing new terms with you. Then, 90 days prior to contract expiration the CEO informs you that they decided to go with the AMC so your services will no longer be needed. Have a nice day.

The groups in Florida are being ambushed near contract renewal time and most don't see it coming as the CEO wants a seamless transition to the AMC so the decision isn't announced to the last possible moment. The Best business decision is to sell while there is something on the table to actually sell to the AMC.

 

[aneftp]

So, you prefer that 6 months prior to the contract renewal the CEO gets bids from AMCs while discussing new terms with you. Then, 90 days prior to contract expiration the CEO informs you that they decided to go with the AMC so your services will no longer be needed. Have a nice day.

The groups in Florida are being ambushed near contract renewal time and most don't see it coming as the CEO wants a seamless transition to the AMC so the decision isn't announced to the last possible moment. The Best business decision is to sell while there is something on the table to actually sell to the AMC.

Best way for groups to protect themselves is locally and within medical staff by laws.

Savvy groups will setup so many road blocks for credendialing. (Minimal 3 months up to 6 months to get credentialed).

Thats just one thing.

Another is to string admin along. Drag out negotiation as admin is playing games by saying they will have AMC come in (this has happened in Florida but also in California)

The key is to have group solidly behind each other.

String along admin. Make credendialing harder and more road blocks.

Finally and this is the kicker. Essentially go week by week contract.

Than on Friday. Tell as admin thinks another week by week contract will be in place on Monday.

Bail. And I mean everyone bail.

Leave hospital hanging.

ORs closed without anesthesia. Since road blocks for credendialing. Even with emergency credendialing. It will take 2-3 weeks. This is what happened at Northern California hospital.

Hospital services severely crippled. 11 of 14 Mds walked.

Hit the admin where it hurts the most. No or cases. No revenue. Admin ended up getting fired. Group got bigger concessions from hospital. Guaranteed money for 3 years.

 

[HenryH]

Just curious about something.... how common is it for an AMC that has had the contract with a particular hospital group for 4-5 years to lose the contract to another AMC that swoops in and decides to bid on it?

 

[deleted171991]

Best way for groups to protect themselves is locally and within medical staff by laws.

Savvy groups will setup so many road blocks for credendialing. (Minimal 3 months up to 6 months to get credentialed).

Thats just one thing.

Another is to string admin along. Drag out negotiation as admin is playing games by saying they will have AMC come in (this has happened in Florida but also in California)

The key is to have group solidly behind each other.

String along admin. Make credendialing harder and more road blocks.

Finally and this is the kicker. Essentially go week by week contract.

Than on Friday. Tell as admin thinks another week by week contract will be in place on Monday.

Bail. And I mean everyone bail.

Leave hospital hanging.

ORs closed without anesthesia. Since road blocks for credendialing. Even with emergency credendialing. It will take 2-3 weeks. This is what happened at Northern California hospital.

Hospital services severely crippled. 11 of 14 Mds walked.

Hit the admin where it hurts the most. No or cases. No revenue. Admin ended up getting fired. Group got bigger concessions from hospital. Guaranteed money for 3 years.

You wanna bet that there's not going to be a next time for that group?

Fool me twice...

 

[aneftp]

You wanna bet that there's not going to be a next time for that group?

Fool me twice...

Group still has contract. Just renewed for another 4 years.

This is what we all need to do. Any mass exodus scares the **** out of surgeons. Shut down the ORs. Hurts hospitals in the pocket books.

The issue is most groups don't have this solidarity. Anytime 70-80% of group leaves it creates chaos.

Chaos is good.

 

[BLADEMDA]

Group still has contract. Just renewed for another 4 years.

This is what we all need to do. Any mass exodus scares the **** out of surgeons. Shut down the ORs. Hurts hospitals in the pocket books.

The issue is most groups don't have this solidarity. Anytime 70-80% of group leaves it creates chaos.

Chaos is good.

When the AMC took over those contracts I mentioned previously (hostile takeover) 70 percent of the Anesthesiologists left. The administration didn't seem to care because the AMC was saving them money.

An all MD practice is a different animal altogether than the ACT which the AMCs utilize. You can believe that Banding together works to keep out the AMC but most of the time it doesn't and you end up with no buyout combined with unemployment or terms dictated by the AMC.

 

[aneftp]

When the AMC took over those contracts I mentioned previously (hostile takeover) 70 percent of the Anesthesiologists left. The administration didn't seem to care because the AMC was saving them money.

An all MD practice is a different animal altogether than the ACT which the AMCs utilize. You can believe that Banding together works to keep out the AMC but most of the time it doesn't and you end up with no buyout combined with unemployment or terms dictated by the AMC.

Yes. It was all MD group out in California.

It also depends how competent hospital management is. Up in PA many hospitals admin are clueless and groups like Napa raped them with courtesy periods where hospitals eat the initial locums fill in period.

 

[Twiggidy]

Yes. It was all MD group out in California.

It also depends how competent hospital management is. Up in PA many hospitals admin are clueless and groups like Napa raped them with courtesy periods where hospitals eat the initial locums fill in period.

But if they call your bluff, then you and everyone else in the group is toast. Especially if the hospital is dead set on getting a new group in the ORs. Then good luck finding another job, especially in hot markets like California. You'll be know as " a member of THAT group"

 

[urge]

Finally and this is the kicker. Essentially go week by week contract.

Than on Friday. Tell as admin thinks another week by week contract will be in place on Monday.

Bail. And I mean everyone bail.

Leave hospital hanging.

ORs closed without anesthesia. Since road blocks for credendialing. Even with emergency credendialing. It will take 2-3 weeks. This is what happened at Northern California hospital.

Hospital services severely crippled. 11 of 14 Mds walked.

I don't think many administrators will fall for this week to week contract after this happened.

What happened to the 3 guys, who didn't support the group, when the group came back?

 

[urge]

Sounds to be like you are, or your group is, trying to decide about selling out to an anesthesia management company. You have one simple question to ask yourself: do I like my profession and want to help it survive in an age of alarming decline and multiple threats OR do I want to sell out, screw over the junior staff who were hoping to find a decent future in your group, and take a big check over morals?


I love money as much as the next guy and I would love more of it to play with but I sure as hell wouldn't sell out and screw over, not only junior staff, but my profession to do it. Call me crazy but I will sleep soundly at night.

The current environment was created by the groups themselves. They hired the new grads for submarket salaries, effectively lowering the average salary for all people who were in transition (new grads and people switching jobs). AMCs capitalized on this artificial low wages and were able to sell themselves to adminsitration as a cheaper alternative. Now the chickens have come to roost.

Groups have always screwed the junior staff.

 

[urge]

The Best business decision is to sell while there is something on the table to actually sell to the AMC.

Did your group sell yet?

Are you now employed by an AMC?

 

[Twiggidy]

Groups have always screwed the junior staff.

First, you're likely very correct.

Second, I should find a way to work for myself to avoid this mess.

 

[deleted171991]

First, you're likely very correct.

Second, I should find a way to work for myself to avoid this mess.

Good luck with the latter. Especially with getting hospital privileges.

 

[Twiggidy]

Good luck with the latter. Especially with getting hospital privileges.

I was thinking something outside of medicine, like a social network or something

 

[BLADEMDA]

Did your group sell yet?

Are you now employed by an AMC?

Let's just say that in 2016 I won't be a partner any longer but rather an employee and grateful for the job.

 

[BLADEMDA]

The current environment was created by the groups themselves. They hired the new grads for submarket salaries, effectively lowering the average salary for all people who were in transition (new grads and people switching jobs). AMCs capitalized on this artificial low wages and were able to sell themselves to adminsitration as a cheaper alternative. Now the chickens have come to roost.

Groups have always screwed the junior staff.

AMCs collect 30-50% more for each Insured patient (non CMS) they bill for. The playing field isn't level so there is no way smaller/medium sized groups can compete against the AMC because the better reimbursement rates leads to lower/no subsidy from the hospital.

Most of us don't see any point working for a lower salary than the AMC offers just to stay independent; on the contrary, I'd rather be an employee rather than partner without the headaches if the pay was the identical. Let someone else worry about Obamacare, Medicare cuts, lack of hospital subsidy, insufficient staffing, dealing with the CRNAs, etc.

Perhaps, the AMC is just a transition to the hospital employed model anyway. If I had to choose between being a hospital employee vs working for an AMC I'd choose the hospital based job as long as the salary was on par.

 

[aneftp]

AMCs collect 30-50% more for each Insured patient (non CMS) they bill for. The playing field isn't level so there is no way smaller/medium sized groups can compete against the AMC because the better reimbursement rates leads to lower/no subsidy from the hospital.

Most of us don't see any point working for a lower salary than the AMC offers just to stay independent; on the contrary, I'd rather be an employee rather than partner without the headaches if the pay was the identical. Let someone else worry about Obamacare, Medicare cuts, lack of hospital subsidy, insufficient staffing, dealing with the CRNAs, etc.

Perhaps, the AMC is just a transition to the hospital employed model anyway. If I had to choose between being a hospital employee vs working for an AMC I'd choose the hospital based job as long as the salary was on par.

And that's the big issue. Why do AMC or any entity collecting 30% plus more in anesthesia revenue with commercial insurance. Heck even Medicare "rewards" volume slightly with AMC. So regular Joe company gets like $20/unit with Medicare and high volume mednax gets $22/unit.

It's just BS even Medicare they can get 10% higher billing in what's supposed to be "single payer" Medicare.

Why doesn't this apply to surgical specialties? Wouldn't orthopedic groups merge and demand even higher reimbursements? why don't management company's consolidate orthopedic or other surgical specialities? Is it that hard?

I know hospitals buy out individual surgical practices and bring them in house. But seems like management companies have a hard time with the high rollers. (Amsurg doesn't technically buyout gi practices but they do 51/49 "joint ventures") with the gi centers (not the individual offices).

 

[deleted171991]

Why doesn't it apply to surgeons? Because they bring their own patients, and they can move elsewhere (with their patients). We don't. Hence the surgeons become partners, we employees.

That's also the reason why surgical management companies don't have such a great future. First of all, they would make less money off the suckers doctors than AMCs. There is more money in facility fees anyway.

 

[Mman]

BLADE. I am not niave, I know the risk but have some friggin b@lls and some morals. If you have a decent contract and good lawyers in your corner then a hospital can't just void a contract without cause. Now if a contract is up for renewal then obviously it's fair game but to simply have an administrator stroll in and void a legal document is unlikely. In my region contracts are three to five years, heard of one being ten years. If your group is up for renewal obviously you see it coming.

Most contracts (ours included) have something like 60-90 day out periods for either side should they choose to exercise it. So even my group's seemingly untouchable rolling 5 year contracts have a way out for the admin if they aren't happy.

 

[2ndyear]

[QUOTE
Why doesn't this apply to surgical specialties? Wouldn't orthopedic groups merge and demand even higher reimbursements? why don't management company's consolidate orthopedic or other surgical specialities? Is it that hard?.[/QUOTE]

You've just predicted the future. I would say it's easier to take over a captive audience, i.e. hospital based specialties and especially us with our reliance on the almighty 'exclusive contract'. But others likely aren't far behind. I could see general surgeons, especially with the acute care surgery model going to a management company, same with OB's and the laborist model. As for ortho, joint replacement is now the biggest consumer of Medicare dollars. I think you're onto something.

 

[CrazyJake]

A colleague had told me he thought these large companies had the money and capabilities to replace any doc or group if they all decided to walk once contract was given away (attempting to play hard ball). Probably a lot depends on the size of group and all doc vs ACT.

 

[urge]

AMCs collect 30-50% more for each Insured patient (non CMS) they bill for. The playing field isn't level so there is no way smaller/medium sized groups can compete against the AMC because the better reimbursement rates leads to lower/no subsidy from the hospital.

If this is indeed the case, seems stupid not to become part of an AMC.

 

[bkell101]

At this point the private groups are 4 kinds:
1- Already sold
2- In the process of selling
3- Wanting to sell just waiting for the right price
4- Wanting to sell but unable and about to lose contract

hey guys/gals...pardon my ignorance as I am only a CA-2. If the above is true and you are a new grad, should you even look at private groups with partnership tracks? What if they say it's a 2-3 year partnership track and you make significantly less than the partners and take more call in order to become a parter....only to find that 2 years into your job prior to you becoming partner, the group sells. Have you just earned less money and taken more call for nothing?

thanks!

 

[urge]

hey guys/gals...pardon my ignorance as I am only a CA-2. If the above is true and you are a new grad, should you even look at private groups with partnership tracks? What if they say it's a 2-3 year partnership track and you make significantly less than the partners and take more call in order to become a parter....only to find that 2 years into your job prior to you becoming partner, the group sells. Have you just earned less money and taken more call for nothing?

thanks!

No one can tell for sure which groups will make it or not. Out of the 3 groups I interviewed with as a new grad, only 1 stands today. Chances are I would have been screwed.

 

[deleted171991]

hey guys/gals...pardon my ignorance as I am only a CA-2. If the above is true and you are a new grad, should you even look at private groups with partnership tracks? What if they say it's a 2-3 year partnership track and you make significantly less than the partners and take more call in order to become a parter....only to find that 2 years into your job prior to you becoming partner, the group sells. Have you just earned less money and taken more call for nothing?

thanks!

I would take a partnership track, but only if the contract had a provision that, in case I am not made partner within 2 years, I will receive the difference in salaries as a bonus. They can't have it both ways.

 

[PainDrain]

Won't the day come when the hospital realizes that throwing cash to an AMC while they cycle through a host of terrible staff every 6 months is probably not a good idea? I asked the question about 3 months ago about poaching an AMC contract because they can't keep the place staffed. I know one small hospital where the group lost their contract to an AMC and that AMC has literally advertised the same jobs every 3-6 months for five years. They obviously can't keep the place staffed beyond the locums guys they manage to turf there. I just don't see how the hospital can keep doing this because eventually one of two things will happen: the surgeons/OBs will complain about the cr@ppy care and lack of continuity and/or the company will hire someone who Fs up big time and it will cost the hospital.

In another local situation, I know of another small place that had a group of independents that worked together in a loose group. A few surgeons didn't like one of the group and they were frustrated so they convinced the hospital to entertain the idea of bringing in an AMC. When the hospital heard they would have to pay a fat stipend up front to the AMC rather than let the loosely affiliated independents stay for free they told the AMC where they could take their "offer".

 

[CrazyJake]

Agree. I think in the next 3-5 yrs it gets really tough (maybe impossible) to be an Independent group unless:

1) you require 0 stipend from hospital
2) are in a decent payor mix area (mostly Medicare/Caid Pts you're screwed), good jobs/economy/reimbursements
3) are in a ACT model supervising at least 3:1 (all doc models as much as I love it just set u up to get undercut)
4) aren't making crazy money and taking crazy amounts of vacation (again...a setup to get undercut)

If I was graduating today, this is what I'd be looking for if I wanted private practice.

 

[PainDrain]

hey guys/gals...pardon my ignorance as I am only a CA-2. If the above is true and you are a new grad, should you even look at private groups with partnership tracks? What if they say it's a 2-3 year partnership track and you make significantly less than the partners and take more call in order to become a parter....only to find that 2 years into your job prior to you becoming partner, the group sells. Have you just earned less money and taken more call for nothing?

thanks!

This is a common scenario. 2-3 years of q4 call so your future partners could be home every night then when the two year mark is reached you get the "we really like you but..." Speech. It happens in every specialty but anesthesia is notorious. Asking for a break-away bonus makes sense but they are not likely to give you that type of contract, those sweetheart deals don't exist in most places.

 

[urge]

Has anyone ever pondered on why is it that you have to pay to be part of a group? What part of the business you are buying? What is the monetary value of a group?

 

[Arch Guillotti]

AMCs collect 30-50% more for each Insured patient (non CMS) they bill for.

Where are you getting this number from? Have you seen an AMC's billing records? I would think that this information would be close to impossible to come by. I don't doubt that they do probably get a better deal though.

 

[seinfeld]

this a great thread on the reality of business in the current anesthesia environment.

I too find it naive to talk about morals and ethics when selling a business. Their is nothing unethical or immoral about selling a business to another reputable business. I would suggest the need to separate the reality of running a business with the practice of medicine. The people I owe are my wife and children and then my parents and siblings.

Our Group sold 2 years ago. Was a great decision given the increasing cost of running a business, the increased GVT compliance issues, the increased Co-Pays that the OBAMA Care generation of insurance forces that no one pays and the increase in GVT payer mix. Our new employees get a better starting wage from day one, no buy in time. They don't have to worry about running a business only taking care of patients.

 

[deleted50478]

Has anyone ever pondered on why is it that you have to pay to be part of a group? What part of the business you are buying? What is the monetary value of a group?

You pay a kickback for referal of cases.

The monetary value of the group is far less than the 'buy in'.

 

[aneftp]

Where are you getting this number from? Have you seen an AMC's billing records? I would think that this information would be close to impossible to come by. I don't doubt that they do probably get a better deal though.

I have seen an AMC billing records. Blade is correct.
Because I know one of the former VP from national AMC.

So commercial insurance definitely pays more based on volume of cases. I also know south Florida pays less than central Florida (per unit) and that if management company has contracts in south Florida and central Florida. Commercial insurance companies will price "adjust upwards" for AMC for their billing in south Florida (aka they will get paid more in south Florida simply for having higher reimbursed units in central Florida). That's why both Team Health and Amsurg (Sheridan) have attacked Central Florida recently because of their higher reimbursements.

 

[aneftp]

this a great thread on the reality of business in the current anesthesia environment.

I too find it naive to talk about morals and ethics when selling a business. Their is nothing unethical or immoral about selling a business to another reputable business. I would suggest the need to separate the reality of running a business with the practice of medicine. The people I owe are my wife and children and then my parents and siblings.

Our Group sold 2 years ago. Was a great decision given the increasing cost of running a business, the increased GVT compliance issues, the increased Co-Pays that the OBAMA Care generation of insurance forces that no one pays and the increase in GVT payer mix. Our new employees get a better starting wage from day one, no buy in time. They don't have to worry about running a business only taking care of patients.

Yup. A lot of new grads fail to realize this.

An AMC offering new grads $300-325k for recent hospital they took over (350k for experienced anesthesiologist ($25k bonus end of the year). Whereas the "partnership" track for former group started at 260k , 280k , 300k than partner (if you made partner). Partners made usually $450-500k.

The issue is if you made partner.

So starting salary is higher for AMC vs private partnership.

Plus private group worked 60 hours a week easily. AMC hours are going to be closer to 50 hours a week.

 

[Planktonmd]

They don't have to worry about running a business only taking care of patients.

This is exactly what AMCs tell physicians when they are about to screw them: "You take care of the patients and we worry about the silly details like money and work hours"
Are you now an AMC executive?

 

[Arch Guillotti]

I have seen an AMC billing records. Blade is correct.
Because I know one of the former VP from national AMC.

OK

 

[Arch Guillotti]

Most contracts (ours included) have something like 60-90 day out periods for either side should they choose to exercise it. So even my group's seemingly untouchable rolling 5 year contracts have a way out for the admin if they aren't happy.

5 years is solid!