Envision loses John Muir WC CA contract

[GassYous]

The problem with arbitration is that the current prevailing rates in the community are the baseline and considered reasonable. The commercial insurance rates will never go up. Insurance company payment for anesthesia services have suddenly become nonnegotiable and hospitals have to recognize that the cost of anesthesia will increasingly come directly from their pockets.

The government goes out of its way to keep power out of doctors' hands. They keep us from owning hospitals and having conflicts of interest of self referrals. They don't allow medicare to negotiate for drug prices (???), prevent physicians from negotiating with insurance companies, mandate nonnegotiable cuts to reimbursements to turn physicians into hospital employees. But it is totally cool for insurance companies, hospital systems, pharmaceutical companies, etc. to run roughshod over all of the patients and workers that comprise the system. It just feels like the whole system is due for a collapse.

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[aneftp]

What is now happening at some of the USAP divisions is that they are trying to negotiate revenue guarantee stipends with hospitals to bridge the gap in pay for their associates and partners. With the NSA, I think the writing is on the wall: the hospital will have to absorb the cost of anesthesia services and bring it in-house.

We all know that. Envision left a contract and usap took over in the south recently. Usap is paying the guys 50k more than what they were making with Envison. It makes no sense unless the hospital is subsidizing locums/guarantees for usap.

Sure they can try to capture more billing misses. But what’s that? Another 3%? The margins are thin once you move out of the lucrative commercial pay markets in affluent suburban cities.

But it’s a catch-22. The hospital doesn’t really want to Absorb anesthesia contracts. Cause when surgeons complain about anesthesia coverage. Admin has to address it. And can’t complain to third parties like amc’s or private practice groups. It’s like fight club. Hospitals do not want to get into a fight club with surgeons demanding anesthesia coverage when they are true w2 in house models.

 

[amyl]

Maybe USAP can make it work because they don’t that the 50-30% suggested on here. Usaps percentage is much lower 🤷‍♀️

 

[Howard888]

Maybe USAP can make it work because they don’t that the 50-30% suggested on here. Usaps percentage is much lower 🤷‍♀️

USAP can definitely make it work more than envision, Napa, Northstar-to a point. They’ll last longer. But the same problem applies to them. They have highest rates in market. They’ll never go up again with NSA. Costs will go up. It will erode into they 20-35% of revenue they get (that’s biggest difference-they revenue share vs straight profit/return). They’ll turn to hospitals too at that point for money (some of their groups with trauma hospitals do have stipends already).

Race to the bottom.

 

[amyl]

Just curious where the cut is 35%. Highest I’ve heard was 22%

 

[thinkorswim]

Maybe USAP can make it work because they don’t that the 50-30% suggested on here. Usaps percentage is much lower 🤷‍♀️

I think you’re missing the forest for the trees here.

Sure, USAP may be the last AMC standing due to better contracts and taking a lower percentage. But as with every other AMC, their margins will be squeezed from both ends. Increasing operating costs will put upward pressure, while fixed/declining reimbursement will put downward pressure. Hospital subsidies and restructuring may help out a bit at first, but even those measures won’t continue to grow revenue forever.

At the end of day, USAP needs to make money their PE investors, and investors hate to see a slowdown in growth. But if you have any insight into the long-term strategy for USAP to continue to grow profits, please do share.

 

[Howard888]

Was told from someone who knows Houston’s deal very well that GHA was around 35%. You’re USAP -ask them. Heard Orlando pretty high as well

 

[Shimmy8]

Hospitals will not allow the ORs to come to a halt. They know this. They’re going to have to adjust and pony up if the insurance/NSA world goes as we predict.

 

[Dr. Rude]

Hospitals will not allow the ORs to come to a halt. They know this. They’re going to have to adjust and pony up if the insurance/NSA world goes as we predict.

Hospitals will not allow the ORs to come to a halt. They know this. They’re going to have to adjust and pony up if the insurance/NSA world goes as we predict.

Only after they try to work docs/CRNAs to death, maybe try 1:6-8 supervision or collaborative model,dive deeper into the applicant pool- see the thread on “Anesthesiologists behaving badly”, etc.

 

[apoondoc]

Seems like they’re struggling to staff the sites they already have but good luck to them.

A quick check of Gaswork just this morning shows that Vituity continues to struggle to staff their sites at

Redding
Manteca
Grass Valley
Stockton
Lodi

Yikes! That is pretty terrible, especially when the two things you may have heard about towns on that list are that Creedence wrote a song about how dismal Lodi is, and the Feds shut down a hospital's entire cardiothoracic surgery department because of rampant fraud and abuse in Redding.

I guess some Vituity apologists might point out that Vituity is doing better elsewhere. Doing better than Lodi? How would that even be possible? But the same Gaswork search proves that they also can't fill their positions in decent cities like

San Jose
Fremont
Folsom
Sacramento

And now they'll have to add Walnut Creek to the list. I suppose they are betting that a lot of MAC partners who stole away from Envision the minute it was free to do so (full buyouts came with five-year clauses) might come back to slum for Vituity. And, of course, doctors who have homes and kids invested in the local community aren't likely to make a fuss, trading one faceless corporate overlord for another. So long as the checks clear, that is.

But, going forward, John Muir is not going to be able to recruit top tier young talent. No, I don't think they will be in an immediate manpower crunch, but nor do I think John Muir will end being a very good place to practice anesthesia.

And, yes, to the person above who asked: John Muir is precisely the hospital where a two-year old died on the operating table during a liver resection that the hospital's own medical director warned against, predicting that if they didn't refer the surgery to UCSF or Stanford, it would end up as a John Muir "clean kill." Which it did. And then they fired the medical director who dared put patient safety before profits.

Double Yikes!

 

[amyl]

Was told from someone who knows Houston’s deal very well that GHA was around 35%. You’re USAP -ask them. Heard Orlando pretty high as well

Lol I doubt it - the Houston guys have a different MO than we do. They're indefinite about their partnership track. They’ve adopted a unified compensation model across the metroplex. They do things very different down there.

 

[Arantius]

Are you kidding me? Vituity can't even staff its own sites, lol

Was just going to say the same. I work locums at one of their sites its a MESS

 

[Howard888]

Lol I doubt it - the Houston guys have a different MO than we do. They're indefinite about their partnership track. They’ve adopted a unified compensation model across the metroplex. They do things very different down there.

Are you all as shareholders not aware of this information?. Given you are “owners” in the company, financials should be available to any “partner” and what % flows from what groups should be common knowledge. Pretty confident in my source, but you should have absolute knowledge if you are a shareholder as that revenue should be easy to track

 

[aneftp]

Usap privacy equity (Welsh Carson) profit take is around 20%. It’s well documented. Want to know why that is the number? Simple. Court papers. Public knowledge. Very simple to search.

One of the napa buyouts was 8 million per partner on the east cost. Again. Public knowledge from divorce case.

It’s funny what one can dig up from legal proceedings.

Now back to usap. After private equity takes 20% off the top. It’s up to the local group how to divide the money. So usap “partners” can still do very well. Most of the usap partners people I know make 550k without extra work. I’m talking one weekend every 8 weeks. So mainly Monday-Friday with lots of early days. The ones who want to hustle. 2 weekends a month can push 700k (in the south). One of my colleagues husbands works for usap as partner. But he works a solid 55-60 hours a week. Does cardiac everything. So usap partnership track is still the best deal in town for those willing to work long term.

But usap profit in many areas is getting destroyed by crnas leaving. Docs working longer hours. Solo in the room more often.

 

[undalay]

But, going forward, John Muir is not going to be able to recruit top tier young talent. No, I don't think they will be in an immediate manpower crunch, but nor do I think John Muir will end being a very good place to practice anesthesia.

Not really, my friend who does cardiac has been approached by locums company to fill in till Vituity can take over and has unbelievable rate. The market now is going crazy. How long it will last. No one knows. There is a crunch and they are not letting everyone know. This is just insane. I heard from one off the directors that AMC is wiling to pay to Staff one of it’s location or it was going to loose the contract. This stakes are high. No one is looking for top talent just warm body

 

[Howard888]

Usap privacy equity (Welsh Carson) profit take is around 20%. It’s well documented. Want to know why that is the number? Simple. Court papers. Public knowledge. Very simple to search.

One of the napa buyouts was 8 million per partner on the east cost. Again. Public knowledge from divorce case.

It’s funny what one can dig up from legal proceedings.

Now back to usap. After private equity takes 20% off the top. It’s up to the local group how to divide the money. So usap “partners” can still do very well. Most of the usap partners people I know make 550k without extra work. I’m talking one weekend every 8 weeks. So mainly Monday-Friday with lots of early days. The ones who want to hustle. 2 weekends a month can push 700k (in the south). One of my colleagues husbands works for usap as partner. But he works a solid 55-60 hours a week. Does cardiac everything. So usap partnership track is still the best deal in town for those willing to work long term.

But usap profit in many areas is getting destroyed by crnas leaving. Docs working longer hours. Solo in the room more often.

Maybe 20% on average but range is 15-35%. Every group worked out it’s own deal. Which should also be public knowledge but at very least shareholder knowledge

And you are absolutely correct on the increased hours right now. USAP MDs getting crushed in some areas (Austin, Denver, Seattle)-they won’t pay CRNAs more or new hires more-so the MDs have to work more as they’ve decided they’d rather work more to keep salary. Private Equity gets their cut either way. It’s the genius of Welsh Carson’s model. They always win.

USAP always stresses income recovery when they buy a group-but they don’t mention that might mean more hours worked. So total income May recover….but revenue/hr might go down. Not to mention burn out and frustration.

 

[Twiggidy]

I wonder what kind of payout the original partners received to give up so much to Envision so easily.

A lot

 

[Twiggidy]

So, I had a friend who worked at the Walnut Creek practice some years back. The numbers you guys are quoting are mostly true and I'm basing this on first hand accounts.

So what's going to happen?

For the most part, everyone who work there who decides to stick with the program, will just have a new company on their paystub. Sure, there may be a few defections, but for how much people on here talk about not being able to up and move because kids, parents, mortgages, whatever, I'm assuming most people just swallow their pride and kiss the new ring. I can't comment on whether it will be a better situation for the anesthesiologists or not, because what is also true, is that Vituity/CEP also does do well recruiting. For the most part people take these positions because for whatever reason they must stay in the area (family, spouse's job, etc)

The ORs at Walnut Creak, Concord, San Ramon, etc all still need to be staff (although Valley Care may be a complete L because I think Stanford will take it over)

I agree that there will be recruitment difficulties in the future, but that is multifactorial. It's still the Bay Area, it's still expensive, and it still suffers from many other "California" problems, which for many people is getting harder to stomach. Maybe that changes as we approach a new normal coming out of the pandemic.

The only problem I tend to have in all of these situations is them actively recruiting you while and RFP is in the process. This is not the first time I've experienced that and I find it a bit disingenuous. But their response was true, the position still needs to be filled as the OR stills needs coverage.

 

[Twiggidy]

No one is looking for top talent just warm body

Well, because my argument is, when you get into the real bowels of private practice anesthesiology, there's no such thing as top talent and only warm bodies. 99% of surgeons and admin don't care how fast you can get that CVP in or how fast the block is place, more so that the CVP is in and the block is placed. For me, you would have to truly define what top talent means for a private practice. Academics may be another discussion...

 

[nimbus]

A quick check of Gaswork just this morning shows that Vituity continues to struggle to staff their sites at

Redding
Manteca
Grass Valley
Stockton
Lodi

Yikes! That is pretty terrible, especially when the two things you may have heard about towns on that list are that Creedence wrote a song about how dismal Lodi is, and the Feds shut down a hospital's entire cardiothoracic surgery department because of rampant fraud and abuse in Redding.

I guess some Vituity apologists might point out that Vituity is doing better elsewhere. Doing better than Lodi? How would that even be possible? But the same Gaswork search proves that they also can't fill their positions in decent cities like

San Jose
Fremont
Folsom
Sacramento

And now they'll have to add Walnut Creek to the list. I suppose they are betting that a lot of MAC partners who stole away from Envision the minute it was free to do so (full buyouts came with five-year clauses) might come back to slum for Vituity. And, of course, doctors who have homes and kids invested in the local community aren't likely to make a fuss, trading one faceless corporate overlord for another. So long as the checks clear, that is.

But, going forward, John Muir is not going to be able to recruit top tier young talent. No, I don't think they will be in an immediate manpower crunch, but nor do I think John Muir will end being a very good place to practice anesthesia.

And, yes, to the person above who asked: John Muir is precisely the hospital where a two-year old died on the operating table during a liver resection that the hospital's own medical director warned against, predicting that if they didn't refer the surgery to UCSF or Stanford, it would end up as a John Muir "clean kill." Which it did. And then they fired the medical director who dared put patient safety before profits.

Double Yikes!

In fairness, many of those places had problems recruiting long before Vituity came to town. Walnut Creek is a more desirable place for most people and will be easier to recruit than Lodi or Redding.

 

[GassYous]

The problem with these places are that they are either in the central valley which sucks or they are coastal which is ridiculously expensive and you get taxed up the ass for both.

 

[Zekchar]

Do you think it really matters who the boss is at John Muir? All the docs there will care about is pay, lifestyle, call, etc. Who they call their boss is just a formality.

Beautifully said. I don't care who is signing the checks, long as they come on time and in the amount I was promised.

 

[mmag]

Envision didn't lose RFPs and contracts, it carefully thought about how best to protect its anesthesia teammates and decided to leave the area.

 

[aneftp]

Envision is just abandoning contracts. They aren’t losing it. In the end. The hospital will end up eating up the cost of anesthesia labor taking them in house or trying to find another third party to take it over.

The anesthesia cost will go up for the hospital.

 

[Ezekiel2517]

It was already known that Envision lost RFP's and contracts to 5 different hospitals in the bay area over the past few months. The letter above is them announcing they are dropping the contracts to all of their ASC's in the area (which is all they had left) as well.

 

[Twiggidy]

Wow. Kind of shady given they were actively recruiting people.

Again, in the OR, "the show must go on" so I'm sure something will be figured out.

 

[nycitygas]

So basically they have lost all of MAC- a group they spent tens of millions buying??

 

[Twiggidy]

I'm trying to be a little bit of the devil's advocate here. we all know they we taking a cut off the top of physician's salaries. that's a given, but I can also see where the change in health care reimbursement probably destroyed profits, especially if a good amount of your facilities are in places with poorly insured or uninsured patients. you contractually have to pay the physicians while also bringing in decreased income. the lower(ish) physicians salaries causes decreased staff which puts a strain on the OR coverage, which overworks people, causing more to leave. and the cycle just goes on and on.

I personally think they stretched themselves too thin and underpaid people in a state where the cost of living is running out of control while people also want to maintain a certain lifestyle. at that point the model was just unsustainable.

 

[GravelRider]

The question I have is whether the acute trouble that private equity anesthesia is having is a direct result of the No Surprise Act or whether that is just one of many factors contributing to this? Is Envision (and NAPA) losing market share because of or despite the NSA?

If private equity anesthesia is having this sort of trouble, what chance does a good old fashioned private practice have?

 

[aneftp]

So basically they have lost all of MAC- a group they spent tens of millions buying??

All MD group buyouts are not as lucrative as heavy 1:4 ACT models.

I doubt the partners got more than 1 million each in all MD model.

They all had to stay 3- or even 5 years at reduced salary. Sheridan (now envision ) didn’t lose a dime. Sheridan probably made the cost basis to acquit the practice within 3 years through salary reduction and more efficient billing powers.

 

[Ezekiel2517]

All MD group buyouts are not as lucrative as heavy 1:4 ACT models.

I doubt the partners got more than 1 million each in all MD model.

They got > 1 mil

 

[aneftp]

They got > 1 mil

It’s not like 2-4 million per partner like act mednax/usap good payor mix sellouts from 2007-2015.

Do the simple math. Sell out MD practice let’s say 1.2 million (That’s actually a real number my buddy got) all MD practice.

Now how much or a paycut are they taking. What’s the break even point. Say it’s a 5 year commitment period. They take a 200k paycut. That’s 1 million over 5 years. Not bad. But not great. Good for period about to retire. And the all important workload. Many AMC salary structure (until the last couple of years) did not have built in protection for staff having to take more calls if short staff.

 

[C4C]

AMCs are accustomed to skimming 25-30% off the top. Private practices don't have that onerous overhead, so they'll do fine.

AMCs acted like they had some "secret sauce," but it was always utter hogwash. Their strategy was to buy up market share and then engage in anti-competitive practices (raising prices). That's it.

Most private practices ask their doctors to "donate" administrative time during periods of stability in the operating room. When an AMC has to pay hourly (plus benefits) for somebody to make schedules, type up meaningless "best practices" handbooks, attend BS meetings with hospital suits and other parasites of the healthcare business that is more inefficiency and waste. And all of that inefficiency and waste comes from you, the anesthesiologist. You are the only source of any revenue for an anesthesia practice. Never forget that. All those other hangers on (who never take call, who can't be sued, who never work weekends) are getting paid by your labor.

 

[IMGASMD]

AMCs are accustomed to skimming 25-30% off the top. Private practices don't have that onerous overhead, so they'll do fine.

AMCs acted like they had some "secret sauce," but it was always utter hogwash. Their strategy was to buy up market share and then engage in anti-competitive practices (raising prices). That's it.
.

Couldn’t agree more. After all these years, no one can ever explain how the amcs can actually make more money than PP. Sure there may be some benefits of saving in overhead, and billing companies…. What else? Better insurance rates? Then? Better negotiator for the stipends from the hospital?
I’d like to hire a good negotiator and a good biller, then call it a day.

 

[Straight2eight]

It’s not like 2-4 million per partner like act mednax/usap good payor mix sellouts from 2007-2015.

Do the simple math. Sell out MD practice let’s say 1.2 million (That’s actually a real number my buddy got) all MD practice.

Now how much or a paycut are they taking. What’s the break even point. Say it’s a 5 year commitment period. They take a 200k paycut. That’s 1 million over 5 years. Not bad. But not great. Good for period about to retire. And the all important workload. Many AMC salary structure (until the last couple of years) did not have built in protection for staff having to take more calls if short staff.

Out of curiosity why do people take deals like this if your buyout gets effectively clawed back from you over the 5 years? Is the cash advance worth that much to people? Is it viewed as a way to guarantee income approaching retirement? Is the real value seen in ridding yourself of the risk of your business? The buyout numbers sound juicy size-wise but it seems more like small potatoes in the end to be selling your non-partner colleagues down the river for isn’t it?

 

[Dr. Rude]

Out of curiosity why do people take deals like this if your buyout gets effectively clawed back from you over the 5 years? Is the cash advance worth that much to people? Is it viewed as a way to guarantee income approaching retirement? Is the real value seen in ridding yourself of the risk of your business? The buyout numbers sound juicy size-wise but it seems more like small potatoes in the end to be selling your non-partner colleagues down the river for isn’t it?

Depends on how you look at it. Things have been volatile for a decade. Five years of security can sound pretty appealing-especially if you are on the tail end of you career. Also the $ often get capital gains treatment. Agree that for younger partners and for non partners-it su(ks.

 

[DrZzZz]

Couldn’t agree more. After all these years, no one can ever explain how the amcs can actually make more money than PP. Sure there may be some benefits of saving in overhead, and billing companies…. What else? Better insurance rates? Then? Better negotiator for the stipends from the hospital?
I’d like to hire a good negotiator and a good biller, then call it a day.

Really? I thought everyone understood how AMCs make more money. They buy up practices to increase their coverage area and then strongarm insurance companies for better rates. And then if the insurance companies don't give in, they charge insane out of network rates. All the while underpaying and overworking the docs. Again, the NSA is making this gameplan nonviable. But that's how it's been up to this point.

 

[Twiggidy]

Out of curiosity why do people take deals like this if your buyout gets effectively clawed back from you over the 5 years? Is the cash advance worth that much to people? Is it viewed as a way to guarantee income approaching retirement? Is the real value seen in ridding yourself of the risk of your business? The buyout numbers sound juicy size-wise but it seems more like small potatoes in the end to be selling your non-partner colleagues down the river for isn’t it?

Also, many times, there could be an RFP lurking around the corner, so in many cases it's a risk vs reward situation. Those RFPs can come from out of no where and you could end up without a lump sum that could earn some capital gains. That's not to say every small group out there should be showing some leg for these AMCs, but rather keep as best a relationship as possible with the hospital and if anything, show the leg to the multispecialty group that may already be in the hospital instead.

 

[tdub878]

The area has excellent payor mix. Substantial commercial rates as well as a large stipend. New group did not ask for extra stipend. Envision lost rfp dt large ask so corporate profits would increase in light of their financial struggles. Game of musical chairs. They lost.

 

[mmag]

The area has excellent payor mix. Substantial commercial rates as well as a large stipend. New group did not ask for extra stipend. Envision lost rfp dt large ask so corporate profits would increase in light of their financial struggles. Game of musical chairs. They lost.

From the New York Times published in 2020: "A new study shows that John Muir Health in Walnut Creek, Calif., was the most costly system in the nation." right under the top photo of the article. "The most costly hospital system in the nation from 2016 through 2018, according to the researchers, was John Muir Health in Walnut Creek, Calif., near San Francisco. Private insurers pay its hospitals four times what Medicare reimburses for care."

Many Hospitals Charge More Than Twice What Medicare Pays for the Same Care (Published 2020)

The gap between rates set for private insurers and employers vs. those by the federal government stirs the debate over a government-run health plan.

www.nytimes.com

 

[Status Sciaticus]

View attachment 360233

Envision didn't lose RFPs and contracts, it carefully thought about how best to protect its anesthesia teammates and decided to leave the area.

LOL "anesthesia teammates"

 

[Twiggidy]

View attachment 360233

Envision didn't lose RFPs and contracts, it carefully thought about how best to protect its anesthesia teammates and decided to leave the area.

Arguable

 

[nimbus]

The area has excellent payor mix. Substantial commercial rates as well as a large stipend. New group did not ask for extra stipend. Envision lost rfp dt large ask so corporate profits would increase in light of their financial struggles. Game of musical chairs. They lost.

At the time that Sheridan bought MAC in 2013, the deal was that Sheridan would not only get 20% of collections but also 50% of hospital stipends from the doctors and they were already heavily stipended at that time. With that extra layer of FAT, there was no way that they could pay competitive competitive compensation without inordinately driving up costs to patients and hospitals.

Also funny that Envision was very recently advertising these now nonexistent jobs for $600-700k on Gaswork.

 

[DirtDocMD]

LOL "anesthesia teammates"

When they’re taking your private group’s contract, they want to “partner” with you. Once they’ve got it, they call you a “teammate”. When they hire a bunch of slackazz CRNA’s with questionable work histories, that you gotta be the malpractice sponge for, you’re an “MDA” in their “care team model”. When they’re explaining to you why they won’t hire more folks, and you’re now covering 1.3 FTE’s, you’re an “employee anesthesia provider”.

Hamster in their wheel, ant in their farm, cog on a wheel.....

 

[nycitygas]

At the time that Sheridan bought MAC in 2013, the deal was that Sheridan would not only get 20% of collections but also 50% of hospital stipends from the doctors and they were already heavily stipended at that time. With that extra layer of FAT, there was no way that they could pay competitive competitive compensation without inordinately driving up costs to patients and hospitals.

Also funny that Envision was very recently advertising these now nonexistent jobs for $600-700k on Gaswork.

Why would MAC even agree to such a terrible deal? No way the group would survive the 3-5 year vesting period

 

[Blockit]

CA woman sues hospital which charged her $6,000 for a URINE TEST

Savannah Thompson walked into John Muir Medical Center in Walnut Creek around midnight on June 14 and left three hours later with a $6,095.70 bill for a single urine test.

www.dailymail.co.uk

This place? 🤣

 

[gasdoc77]

CA woman sues hospital which charged her $6,000 for a URINE TEST

Savannah Thompson walked into John Muir Medical Center in Walnut Creek around midnight on June 14 and left three hours later with a $6,095.70 bill for a single urine test.

www.dailymail.co.uk

This place? 🤣

Haven't pain practices gotten in trouble (even criminally) for the same thing?

 

[BLADEMDA]

Wow Amyl selling the pyramid scheme of USAP. Hey don’t blame her -her stock will go up. Of all of these PE groups USAP was most intelligent in the groups they selected -strong economies, strong groups….but with those strong economies now comes insane cost of living increases and inflation for any non MD or non partner MD. Add no increases in rates per the NSA (rumor is USAP accepted a decrease in rate with United in some markets to pad the books for a stock sale). Also, as another person pointed out-USAP is in keep things good for as long as possible mode with #1>>>>#2
1. PE
2. mD partners

Rest of corporation taking a bath. USAP will be last man standing but they’ll lose some of their sites sooner than later and eventually fail (unless they find away to beat the no surprises act-which never say never, private equity are smart folks).

USAP typically takes a 20 percent cut from profits. Can USAP get leaner ? The physicians are doing well under USAP at this time. I suspect USAP is still getting at least 15 percent more in their contracts than a single private group would collect. The model works…for now.