Hospital drops contract, AMC sues hospital, Anesthesiologists sue AMC

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Have we talked about this one yet? Renown hospital in Reno gives 90 days to NAPA for not having enough staffing. NAPA sues Hospital. Anesthesiologists sue NAPA to get out of non-competes which are for the hospital, +25 miles for 2 years. If the non-competes are ruled non-enforceable then there's no longer leverage for the AMCs to threaten to take all their workers.

www.2news.com

Renown Terminates Contract, Surgery Staffing at Risk of Lawsuits

In a briefing Tuesday, April 5, Renown Health weighed in on camera about its anesthesiology staffing issue.
www.2news.com www.2news.com

Interesting that Renown and NAPA issued a joint statement. It's all just a business matter over a couple of bucks that the public shouldn't be concerned about. The statement from the anesthesiologists was refreshingly free of corporate speak.

Edited to add job link in case anyone is interested in working there.

Anesthesiologist – Renown Regional Medical Center – Full Time – North American Partners in Anesthesia (NAPA)

napacareer-search.com napacareer-search.com
 
No wonder they were offering that huge sign on. I knew napa was bad news although reno is cheap and there's no state tax.
 
Non-competes are a problem, for sure, but maybe it’s time for some hospitals to revisit the idea of not giving exclusive contracts to anesthesia groups?
 
GravelRider said:
Non-competes are a problem, for sure, but maybe it’s time for some hospitals to revisit the idea of not giving exclusive contracts to anesthesia groups?
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Non compete as a concept, I could never understand.
If you’re sooo great, why do you have the need to tie me down. What kind of trade secrets do I hold, that I couldn’t work within 30 min radius of the hospital?! Even if I know the unit rate, which I don’t, not as a employee. Restrict the people in leadership positions….. I am just your regular Joe anesthesiologist, you got much bigger fish to fry.
 
The Florida legislature is considering a bill this year that would add this to the restrictive covenant provision in statute:

(3) A restrictive covenant in an employment agreement
38 between a physician and a hospital is not supported by a
39 legitimate business interest if it does not include an option
40 for the physician to buy out of the restrictive covenant. The
41 Legislature finds that a restrictive covenant without this
42 option limits patient access to physicians and increases costs
43 and is void and unenforceable. This subsection applies to
44 restrictive covenants entered into on or after July 1, 2022.
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Endee said:
Wow. I wish all those physicians the best, it seems like they have the high ground, morally at least, and hopefully legally as well.

May this be one more step in the slow death of PE-backed AMGs.
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secretasianman said:
Respect to you guys for taking a stand. Good luck to u, for the sake of our profession.
Click to expand...

Appreciate it. 👍
We have always been a strong group of physicians and I have always talked about our community and our group with deep love and respect. I still feel like this today.
We just couldn't sit around and do nothing while NAPA ruins our anesthesia practice and our long term relationship with Renown. We've been here since 1949, and I wouldn't want to practice anywhere else.
This situation is sticky, but we all hope to remain here in Reno. I am either retiring or will continue to work here depending on how this all settles out in court in a few weeks.
In the end we want to take care of our community and have a safe place to practice, especially for those who come after us.
We are MD only for now. NAPA has clear intentions of changing that to ACT along with other aspects of our practice to squeeze out more revenue for private equity owners. We all fall by not doing anything, so we are taking a stand for what is right.
 
sevoflurane said:
Appreciate it. 👍
We have always been a strong group of physicians and I have always talked about our community and our group with deep love and respect. I still feel like this today.
We just couldn't sit around and do nothing while NAPA ruins our anesthesia practice and our long term relationship with Renown. We've been here since 1949, and I wouldn't want to practice anywhere else.
This situation is sticky, but we all hope to remain here in Reno. I am either retiring or will continue to work here depending on how this all settles out in court in a few weeks.
In the end we want to take care of our community and have a safe place to practice, especially for those who come after us.
We are MD only for now. NAPA has clear intentions of changing that to ACT along with other aspects of our practice to squeeze out more revenue for private equity owners. We all fall by not doing anything, so we are taking a stand for what is right.
Click to expand...
Good luck to you!!
 
sevoflurane said:
Appreciate it. 👍
We have always been a strong group of physicians and I have always talked about our community and our group with deep love and respect. I still feel like this today.
We just couldn't sit around and do nothing while NAPA ruins our anesthesia practice and our long term relationship with Renown. We've been here since 1949, and I wouldn't want to practice anywhere else.
This situation is sticky, but we all hope to remain here in Reno. I am either retiring or will continue to work here depending on how this all settles out in court in a few weeks.
In the end we want to take care of our community and have a safe place to practice, especially for those who come after us.
We are MD only for now. NAPA has clear intentions of changing that to ACT along with other aspects of our practice to squeeze out more revenue for private equity owners. We all fall by not doing anything, so we are taking a stand for what is right.
Click to expand...

Why did you guys sell out in the first place?
 
sevoflurane said:
Many reasons I can’t go into. Needless to say, bad move that will never be repeated. Things were actually really good under Mednax. Fire sale to NAPA during covid changed everything. NAPA is trimming all practices down for a bigger PE fish to take the bait and kick the bucket down the line.
Click to expand...
500$ locum rate is coming?
 
nimbus said:
I obviously don’t know about this case. But generally the reasons are doom and gloom about the future of anesthesiology (a self fulfilling prophecy) and the opportunity for a payout.
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Sometimes smaller groups just can't compete with the bigger players in terms of contracts. For example, AMCs can get 50% more per unit than a smaller group covering just one hospital. If the CEO has to pay a subsidy the group isn't competitive against the AMC. The playing field isn't level.

While that may not have been the case in RENO it is true for a lot of groups who joined USAP. Despite USAP taking 20% off the top the groups didn't see a decline in income and got the security of a major player in the business.

Sevo will tell you Mednax was a decent AMC to work for when they had the contract. Unfortunately, Mednax sold to NAPA which isn't interested in maintaining the same level of quality because profits come first.
 
sevoflurane said:
Appreciate it. 👍
We have always been a strong group of physicians and I have always talked about our community and our group with deep love and respect. I still feel like this today.
We just couldn't sit around and do nothing while NAPA ruins our anesthesia practice and our long term relationship with Renown. We've been here since 1949, and I wouldn't want to practice anywhere else.
This situation is sticky, but we all hope to remain here in Reno. I am either retiring or will continue to work here depending on how this all settles out in court in a few weeks.
In the end we want to take care of our community and have a safe place to practice, especially for those who come after us.
We are MD only for now. NAPA has clear intentions of changing that to ACT along with other aspects of our practice to squeeze out more revenue for private equity owners. We all fall by not doing anything, so we are taking a stand for what is right.
Click to expand...

Good luck!

Was trying to remember who is from Reno.
 
sevoflurane said:
Appreciate it. 👍
We have always been a strong group of physicians and I have always talked about our community and our group with deep love and respect. I still feel like this today.
We just couldn't sit around and do nothing while NAPA ruins our anesthesia practice and our long term relationship with Renown. We've been here since 1949, and I wouldn't want to practice anywhere else.
This situation is sticky, but we all hope to remain here in Reno. I am either retiring or will continue to work here depending on how this all settles out in court in a few weeks.
In the end we want to take care of our community and have a safe place to practice, especially for those who come after us.
We are MD only for now. NAPA has clear intentions of changing that to ACT along with other aspects of our practice to squeeze out more revenue for private equity owners. We all fall by not doing anything, so we are taking a stand for what is right.
Click to expand...

Stand strong and you'll be a model for anesthesiologists across the country to take the specialty back.
 
Endee said:
Stand strong and you'll be a model for anesthesiologists across the country to take the specialty back.
Click to expand...

No offense, but they willingly sold to private equity and made a few bucks off that transaction. What did they think was going to happen? Did they not foresee the capitalist squeeze coming?
 
GravelRider said:
No offense, but they willingly sold to private equity and made a few bucks off that transaction. What did they think was going to happen? Did they not foresee the capitalist squeeze coming?
Click to expand...

Everyone has their price and we all know people can make bad decisions, especially when Joe Wallstreet, MBA is waving a big check in your face. I think a lot of groups now realize that the juice wasn't worth the squeeze except for the ones who were ~5yrs from retirement. I'd rather them realize it and try to take things back than just look at their situation and say "you get what you ask for."
 
Endee said:
Everyone has their price and we all know people can make bad decisions, especially when Joe Wallstreet, MBA is waving a big check in your face. I think a lot of groups now realize that the juice wasn't worth the squeeze except for the ones who were ~5yrs from retirement. I'd rather them realize it and try to take things back than just look at their situation and say "you get what you ask for."
Click to expand...
There were a lot of reasons that I can't really go into on this public thread.
 
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Endee said:
Everyone has their price and we all know people can make bad decisions, especially when Joe Wallstreet, MBA is waving a big check in your face. I think a lot of groups now realize that the juice wasn't worth the squeeze except for the ones who were ~5yrs from retirement. I'd rather them realize it and try to take things back than just look at their situation and say "you get what you ask for."
Click to expand...

I’m not saying I hope the anesthesiologists here are not successful, but I also have a lot less sympathy for those that took the million dollar payday and are now wondering why they are being squeezed. It sounds like NAPA wanted to bring in CRNAs and was met with resistance from the group. The group can’t staff the hospital appropriately and here we are. You are not ever going to be able to pay 400-450k (assuming that is what NAPA is paying in Reno) to someone and say “here sit your own cases taking call in this full service hospital.” I don’t care how cute Reno is, that was always going to be a difficult job to recruit anesthesiologists to.

I’m making a lot of assumptions above, but this situation is an opportunity for a bunch of people looking to form a group and start a new practice. Obviously old members have non-competes preventing this, but people in the region should be licking their chops to scoop that contract up. I know of at least one thriving small practice that formed and scooped up a contract from the ashes of an AMC fire.
 
Wow sevo I’m sorry and I hope you Guys come out ahead….. is Nevada a right to work state? F non competes…. Where else is Napa struggling. I was not part of the sell out to PE…. Maybe it’s just in my little part of the world but my amc doesn’t suck like this. All the best sevo
 
sevoflurane said:
There were a lot of reasons that I can't really go into on this public thread. A little over half of the original members remain. The rest have retired or resigned- mostly due to NAPA. Those of us that remain feel guilty of the situation. Mednax was actually good for us but now Renown is firing NAPA. We are trying to pave a brighter future for our community and for the younger anesthesiologists who have joined our group. Reno is an incredibly vibrant place to live. I also want it to be an incredibly vibrant place to work as an anesthesiologist. We do everything here: cardiac, peds, truama, high risk OB, pain, icu, regional etc all under an MD only extremely fair model. It has been a great place to work and take care of patients.
NAPA has changed all that.
Click to expand...
Although I think non-competes suck in general, I can understand it somewhat IF, AND ONLY IF a physician or group are bringing business into the hospital. That's not the case with anesthesia. We had several Mednax groups in Atlanta. I'm sure Mednax bought them originally for more than NAPA paid for all of Mednax. Only one remains under NAPA. One of the groups had their non-competes enforced for physicians AND anesthetists, so every one of them was out of a job.
 
Napa is probably one of if not the nastiest amc in terms of non compete.

They actually lost. A contract and the new amc (also pretty evil) offered to pay X non compete fee per anesthesiologist. Nope. Napa wanted any entire year of salary per anesthesiologist as payment which is crazy.

Hospitals can always use the nuclear option and take docs w2 in hospital system model. Claim safe harbor. And be done with it.

But hospitals too lazy to employed docs as well.
 
jwk said:
Although I think non-competes suck in general, I can understand it somewhat IF, AND ONLY IF a physician or group are bringing business into the hospital. That's not the case with anesthesia. We had several Mednax groups in Atlanta. I'm sure Mednax bought them originally for more than NAPA paid for all of Mednax. Only one remains under NAPA. One of the groups had their non-competes enforced for physicians AND anesthetists, so every one of them was out of a job.
Click to expand...
That is exactly it.
 
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amyl said:
Wow sevo I’m sorry and I hope you Guys come out ahead….. is Nevada a right to work state? F non competes…. Where else is Napa struggling. I was not part of the sell out to PE…. Maybe it’s just in my little part of the world but my amc doesn’t suck like this. All the best sevo
Click to expand...
Thanks @amyl I am not so worried about working here, but more concerned for what is left here after it is all set and done.
I think we can pull out of this, but regardless we are not moving from Reno.
 
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I feel bad for the private guys but half of them have left since they took the payout. Hard to tease through all the details here but per the article they’re understaffed 25%. Definitely not going to make a recovery under an AMC banner. Maybe if they went private again. Hospital just wants the ORs staffed. My guess is CRNAs are in the future whether it’s NAPA pushing it or the hospital. I could be wrong. I hope I am.

Easy to blame this all on NAPA and believe me I’d love to, but they’ve been in control what 1 year? The group has probably been short staffed for quite a while longer than that. I don’t know all the reasons they sold out, but if you’re really looking out for the hospital and the patients, and not a payout, you have to look at this and say it was a bad decision.
 
sevoflurane said:
$185 last I checked. 😂
Click to expand...

GravelRider said:
I’m not saying I hope the anesthesiologists here are not successful, but I also have a lot less sympathy for those that took the million dollar payday and are now wondering why they are being squeezed. It sounds like NAPA wanted to bring in CRNAs and was met with resistance from the group. The group can’t staff the hospital appropriately and here we are. You are not ever going to be able to pay 400-450k (assuming that is what NAPA is paying in Reno) to someone and say “here sit your own cases taking call in this full service hospital.” I don’t care how cute Reno is, that was always going to be a difficult job to recruit anesthesiologists to.

I’m making a lot of assumptions above, but this situation is an opportunity for a bunch of people looking to form a group and start a new practice. Obviously old members have non-competes preventing this, but people in the region should be licking their chops to scoop that contract up. I know of at least one thriving small practice that formed and scooped up a contract from the ashes of an AMC fire.
Click to expand...
Think about those who joined later without the big payout.

I think NAPA reno is a big group. Where can you recruit 50+ anesthesiologists?
 
sevoflurane said:
That is exactly it.
American Securities (PE)/NAPA bought ALL of mednax for a mere 50 million. They doubled in size (6000+ anesthesia providers), gained further control over market areas they have never been in and just paid pennies for it (small to medium sized groups sell in that range).
Mark my words, ever since the mednax covid fire-sale, NAPA PE is looking for a paycheck. The return on investment associated with the medanx/napa deal will be enormous and I believe that at the same time, the squeeze down from PE firms will only get tighter for both physicians and hospital CEO's.
Click to expand...
50 million!!! That’s almost nothing. Crazy.
 
sevoflurane said:
Appreciate it. 👍
We have always been a strong group of physicians and I have always talked about our community and our group with deep love and respect. I still feel like this today.
We just couldn't sit around and do nothing while NAPA ruins our anesthesia practice and our long term relationship with Renown. We've been here since 1949, and I wouldn't want to practice anywhere else.
This situation is sticky, but we all hope to remain here in Reno. I am either retiring or will continue to work here depending on how this all settles out in court in a few weeks.
In the end we want to take care of our community and have a safe place to practice, especially for those who come after us.
We are MD only for now. NAPA has clear intentions of changing that to ACT along with other aspects of our practice to squeeze out more revenue for private equity owners. We all fall by not doing anything, so we are taking a stand for what is right.
Click to expand...
Why did you sell to them in the 1st place? or did the hospital force your hand? how long has napa been there?

I would be surprised if you guys prevailed because after all you are the "little guy".

Disclosure: I NEVER trusted any of my employers and this is why I have 1 foot in the practice and 1 foot out. I am NEVER all in. This is as sleezy as it gets..
 
OptionOffense said:
Why did you sell to them in the 1st place? or did the hospital force your hand? how long has napa been there?

I would be surprised if you guys prevailed because after all you are the "little guy".

Disclosure: I NEVER trusted any of my employers and this is why I have 1 foot in the practice and 1 foot out. I am NEVER all in. This is as sleezy as it gets..
Click to expand...
Lots of people like to “slam” the folks who “sold out” to an AMC. Maybe some of you don’t know how this works.....

A group has a 2-3 year contract with the hospital. In ADDITION, those contracts can be cancelled in as little as 90 DAYS.

Translation??? Even if a group has been at a hospital for DECADES, all it takes is a CEO and a pen to kick you out on your azz.

Knowing this (and the way that hospitals have become more “corporate” over the last 20 years), when someone comes in and waves $1/$2/$3 million in your face to “sell out”, you DO IT.

The other option is to sit around, and a year later, some idiot from Northstar/Envision/Sound/etc comes in, sweet talks the CEO, and THEY take the contract, AND THEY DO NOT BUY YOU OUT. They simply take the contract. You get NOTHING.

It’s not “greed” or “selling out”, it is simply “cashing out”, while you still have the chance, before some CEO who is there on a 3 year stint to “slash costs”, renders what you have WORTHLESS, and hands the “exclusive anesthesia contract” over to a group that TAKES the contract (not BUY it).
 
narcotics999 said:
Think about those who joined later without the big payout.

I think NAPA reno is a big group. Where can you recruit 50+ anesthesiologists?
Click to expand...

Whoever ends up with the contract, will be like any other AMC take over.

Hire some guns and pay crazy money for a bit, and then staff 1:4 or 1:8.

If they’re operating at 75% now, according to someone in the thread, it will be difficult to hire another 15 anesthesiologists to be full staff. Sure people can work overtime to bridge for a bit, but you can only work at 1.25x for so long.

Good luck sevo.
 
IMGASMD said:
Whoever ends up with the contract, will be like any other AMC take over.

Hire some guns and pay crazy money for a bit, and then staff 1:4 or 1:8.

If they’re operating at 75% now, according to someone in the thread, it will be difficult to hire another 15 anesthesiologists to be full staff. Sure people can work overtime to bridge for a bit, but you can only work at 1.25x for so long.

Good luck sevo.
Click to expand...
Why wouldn’t NAPA just do that?
 
Southpaw said:
I feel bad for the private guys but half of them have left since they took the payout. Hard to tease through all the details here but per the article they’re understaffed 25%. Definitely not going to make a recovery under an AMC banner. Maybe if they went private again. Hospital just wants the ORs staffed. My guess is CRNAs are in the future whether it’s NAPA pushing it or the hospital. I could be wrong. I hope I am.

Easy to blame this all on NAPA and believe me I’d love to, but they’ve been in control what 1 year? The group has probably been short staffed for quite a while longer than that. I don’t know all the reasons they sold out, but if you’re really looking out for the hospital and the patients, and not a payout, you have to look at this and say it was a bad decision.
Click to expand...
The losers are the new hires that never got the 7 figure pay day. The old guard knew what they were giving up. I hope they stick it to the AMC, but I can’t feel sorry for people that sold the group for profit. Private equity and medicine shouldn’t be partners. All PE cares about is ROI, and if they burn it to take the loss and move on, they don’t care about the down the line issues with that either.
 
IlDestriero said:
The losers are the new hires that never got the 7 figure pay day. The old guard knew what they were giving up. I hope they stick it to the AMC, but I can’t feel sorry for people that sold the group for profit. Private equity and medicine shouldn’t be partners. All PE cares about is ROI, and if they burn it to take the loss and move on, they don’t care about the down the line issues with that either.
Click to expand...
No offense, but you have zero context as to our 73 y/o group.
But yes, the rest or you statement is 100% accurate.
 
DirtDocMD said:
Lots of people like to “slam” the folks who “sold out” to an AMC. Maybe some of you don’t know how this works.....


The other option is to sit around, and a year later, some idiot from Northstar/Envision/Sound/etc comes in, sweet talks the CEO, and THEY take the contract, AND THEY DO NOT BUY YOU OUT. They simply take the contract. You get NOTHING.

It’s not “greed” or “selling out”, it is simply “cashing out”, while you still have the chance, before some CEO who is there on a 3 year stint to “slash costs”, renders what you have WORTHLESS, and hands the “exclusive anesthesia contract” over to a group that TAKES the contract (not BUY it).
Click to expand...
👍
 
sevoflurane said:
It's more complicated than that even. But rest assured these decision are never taken lightly.
Click to expand...
Honestly, with all due respect for all of your hard work, you guys look like suckas for penning that explanation. Just take your **** and move on. Its like asking your ex gf to take you back. Shame on you for being tied to the community that you cant imagine leaving.
 
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