ER group losing contract vs other specialities

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emergentmd

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Can anyone explain me why when an ED group is taken over by Emcare (or similar), the ED partners get nothing.

But when Anesthesia is taken over, they pay off the partners for Millions? The anesthesia group that was bought out recently had some golden parachutes given to partners.

Why is the ED groups so different?

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The thing that has value in the EM universe is the contract to staff an ED. If a CMG or a private group comes in an convinces the hospital to simply not renew with one group and contract with a new group there's no reason to pay off the existing group's partners. In some cases rather than trying to take the contract by convincing the hospital a predatory group will buy up the existing group. If that happens then they have to pay the existing partners.

For other specialties, to use your example, anesthesia, there is no contract*. There is a practice with a lot of docs and (most importantly) an existing referral base of surgeons. The payoffs are to buy the practice and, in general, keep the docs and referral base.

*Unless the hospital is a "closed shop" with a single, contracted anesthesia group running the OR. Interestingly an arrangement like that at once makes the group that signs on immune from competition from other anesthesiologists but vulnerable to predation of its contract. Having a hospital go closed can be a Faustian bargain.
 
Can anyone explain me why when an ED group is taken over by Emcare (or similar), the ED partners get nothing.

But when Anesthesia is taken over, they pay off the partners for Millions? The anesthesia group that was bought out recently had some golden parachutes given to partners.

Why is the ED groups so different?

Are you sure general Anesthesiology groups routinely get "golden parachutes for millions" when they lose their contracts? Or are these groups that have an outpatient Pain group attached to them, which has assets, a patient base, equipment, and other value that a hospital based group that simply provides a service, wouldn't have? Or are these groups partnered with surgeons in surgery centers, which have separate salable value? Not being an Anesthesiologist, I don't know that I can give you an exact answer to your question, but I'm sure it has something to do with "Hot dogs" and "vendors."

Post #75, here:

http://forums.studentdoctor.net/threads/respect-for-physicians.1003921/page-2#post-14033654
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Ruminations On Hot Dogs & Emergency Medicine

I was told once, at the start of my career in EM, the difference in being a "customer" versus a "vendor" and that this would dictate how I was treated throughout my career. I had no idea how important this was, and how much it would permeate every nook and cranny of my job, and the system I had to navigate.

You see, a spine surgeon for example, is a "customer" of the hospital. He brings a practice, patients and therefore money to a hospital. If he leaves, the practice, the patients and the money go with him. The spine surgeon is the guy that walks up to the hot dog stand and every night orders 100 hot dogs. We don't always have to like him, but "By golly!" he pays half of our quarterly bonus! This customer must be kept happy, at all costs. He's a high roller, making him rich can makes us rich, and there's not that many of him out there. "The customer is always right," and the customer will be treated accordingly. Customer a-s is always kissed.

A patient, also is a customer. A patient brings with him a goody bag of the hospitals favorite treats called an insurance card. It is this goody bag that he gives as currency in exchange for a hot dog. If the patient leaves the hospital, he takes the goody bag with him. This goody bag could contain a lump of coal, or more often a few hundred dollars. Hell, sometimes we've gotten goody bags with tens of thousands of dollars in them (chest-pain admit, heart-cath, plus big facility fees), or hundreds of thousand dollars (complex spine surgery, trouble with vent weaning, prolonged ICU course) hiding in them! This customer doesn't always tip big, and doesn't always buy lots of hot dogs, but damn it, there's TONS just like him out there. We can afford to p-ss off a couple here or there, but on balance, if we keep most happy, and keep them coming, the numbers will add up. Once again, "this customer is always right," and the customer will be treated accordingly. Customer a-s is always kissed, ESPECIALLY when they carry goody bags full of surprises.

An Emergency Physician is, well...a vendor. He's the guy selling the hot dogs at the stadium (myself included). His job is primarily to keep the goody-bag bearing customers happy, and to keep the lines a movin'. His job is an important one, no doubt, but it's different. He comes to the hospital with no goody bag of his own and no practice, patients or business to bring. Sure, we'd like to rent a space to somebody with a hot dog cart, 'cause after all, a big juicy hot dog does keep the customers happy after all. But we don't really care if it's Nathan's Hot Dogs, Hebrew National, or Tap Dance Coney, as long as the customers like it. And you know what, after all, if Tap Dance Coney gets tired of tap dancing, or gets tired of following all of our stupids sanitation policies, it's cool. We'll just call Nathan's, Hebrew National, Outhouse Dog, or who gives a rip, we'll bring in someone not even fully trained to cook hot dog. After all, the others have been drooling over the contract and have all been promising to do it for cheaper. After all, the customers just want a halfway decent friggin' hot dog, service with a smile and to get back to watching the damn game.

A smart vendor knows his place, knows who's who, and what everyone's role is. A smart vendor knows that it's a privilege to be given the opportunity to have access. After all, it is access to the "customers," that pays the vendor's bills. A smart vendor never loses sight of the fact that even though the customers sometimes can be very difficult and demanding, they put food on his table. A smart vendor that shows up early, leaves late and wears a polite smile in the face of adversity will be able to pay his bills, and may even do very well if he can grill a halfway decent dog. A vendor, however, will never be treated like a "customer," and definitely never like the high roller. If a vendor gets to big for his own britches, well...we'll just get a new one who'll fit in the pants.
 
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The anesthsiology group has an exclusive contract with the hospital system (6 + hospitals). My Group (ED) has the same exclusive contract with hospital system.

They were bought out and partners did well with a payoff, nonpartners got dumped on.

I just don't see how this is any different than EM groups.

Why would a management group buy out the gas group for millions but Emcare would not pay our group anything? I understand that they took over the collections but it was not worth the millions that they paid out to the gas partners.

It just seems like both situations are the same but are treated completely different during a takeover. I would be happy if they bought us out and gave me a $1mil payoff. I would not need to work much at all after that.
 
The anesthsiology group has an exclusive contract with the hospital system (6 + hospitals). My Group (ED) has the same exclusive contract with hospital system.

They were bought out and partners did well with a payoff, nonpartners got dumped on.

I just don't see how this is any different than EM groups.

Two possibilities:

1) Despite both having exclusive contracts, anesthesia had different language in the contract regarding termination then you did.

2) Your anesthesiologists are politically connected and the buy-out was to keep the influential anesthesiologists (of which all were probably partners) from stealing surgeons/cases to other facilities. Not something that's an option in EM.
Why would a management group buy out the gas group for millions but Emcare would not pay our group anything? I understand that they took over the collections but it was not worth the millions that they paid out to the gas partners.

It just seems like both situations are the same but are treated completely different during a takeover. I would be happy if they bought us out and gave me a $1mil payoff. I would not need to work much at all after that.
 
Most anesthesia groups are contracted as exclusive providers, employed by the hospital or a management company, or academic. The follow the surgeon around arrangement with no contracts and only fee for service is not the norm. Though that may be more common at surgicenters, office based practice, etc.
However the reason that a company would buy a group vs take over their contract for nothing is two fold.
1. The group is efficient, well liked and does not charge an excessive subsidy. The hospital will never oust this group as a management company offers no advantages and will bring in mostly unknown staff. If you have no subsidy at all, a management company can never steal that contract as long as the group is providing quality service.
2. The group is too large and too specialized to easily replace. If the hospital prides itself on side line research activities, supspecialty teams, centers of excellence, etc, they may have deep and strong relations with the hospital and be integrated into the governance. It may be extremely difficult to replace the existing group with equivalent providers. They need to keep those people there. The only way to do that is by buying them off. And it does cost many millions, with multi year salary guarantees, etc.
The sloppy, poorly run, argumentative group providing surly service and charging excessive subsidies for trauma and OB call, etc. is the low hanging fruit ripe for picking. There is a difference.
The surgeons, if vocal and integrated in the governance structure, could also do a great deal to stop an outside takeover. Assuming they were very happy with the service provided.
 
Having seen a recent anesthesia group takeover at my hospital and heard the details through a good friend if mine in their group I can tell you that not all groups have golden parachutes. The parachute you speak of may simply have been the group's A/R. In general the A/R belongs to the partners and in some groups the nonpartners get nothing if the group dissolves. This is the same in the EM world. EM and gas are actually in very similar situations as hospital based specialties. Both can have outside practices (urgent cares, pain centers, free standing EDs, surgery centers), but at their core they are hospital based specialties.
 
I've never heard of non partners getting anything in a buy out. They don't own a share of the practice so they don't deserve a share of the buy out.
Anesthesia groups most definitely have been sold out for millions with remaining partners getting multi year salary guarantees as well in some cases. We've discussed them on the private anesthesia forum.
 
This is what I put up recently in the anesthesiology forum (ironically, or coincidentally, responding to a quote from IlDestrierio!).

"This is my first post in the anesthesiology forum in about 2 years (I had a dustup with dbag1234, and that was that). The EM group with which I worked first out of residency was huge - about 60 docs, and about 20 partners out of that. Covered 3 hospitals and a freestanding ED, all in the same health system. What did the hospital do? Just declined to renew the contract. There was no offer from EmCare or EMP or any of them to buy out the group. The hospital just said, "become hospital employees, or walk. We don't care." Interestingly, the hospital had bought up many practices, including a huge cardiology practice, general surgery, and radiology, but that was 5 years ago. Now, instead of a $30 or $50 million purchase, they got the group for free. And, before you say "work somewhere else", that's not really an option for everyone, because the reasonably located places (that are less than an hour or 100 miles away) can only absorb so much, like maybe 20% of any group at any time (for all opportunities - not just at one hospital).

So, instead of giving them the keys, they just said "we don't care for your business - come work with us, or don't", knowing that a large majority would do just that. And, when your group only covers one health system, has a catchment area of >1 million people, sees over 200K patients per year in the ED, and has been there for 30 years, with 5 or 6 contract renewals in there, you don't think it will ever happen, until it does, and you got nowhere to go. Just remember that business, as a "virtual person", is a sociopath."
 
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