How do national anesthesia groups make themselves affordable?

[acidbase1]

From what I hear they charge a 20-30% management fees. So how are they cheaper than homegrown groups? The hospital I'm at received a bid from north star and the CEO told me it was astronomical

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[Precedexed Out]

From what I hear they charge a 20-30% management fees. So how are they cheaper than homegrown groups? The hospital I'm at received a bid from north star and the CEO told me it was astronomical

I'd like to know this too. It seems like anesthesiologists should easily be able to make more money and work privately because the middle man is eliminated.

 

[acidbase1]

I know they over work their providers and pay them less so maybe they make up the margins there

Just seems like local groups would be the way to go and should be able to underbid them

 

[dmk5n]

Maybe a bit tinfoil...
I've heard that there are kickbacks to C-suites execs...
Under the table board positions on captive insurance companies, loans at 0%, etc...
All these Stark laws, and kickback laws only apply to doctors.
Not businesses.
It's how the rest of the world works.

 

[leaverus]

From what I hear they charge a 20-30% management fees. So how are they cheaper than homegrown groups? The hospital I'm at received a bid from north star and the CEO told me it was astronomical

that's odd. I was under the impression they secure the contract in the first place by severely underbidding pretty much anywhere they want to get their claws on. I know from firsthand knowledge that when they made a bid for the contract at my hospital, it was apparently for 1/4th(!) of what we'd been getting in subsidy. obviously they may have different business strategies but in your scenario I don't know how an "astronomical" bid could have done anything but get a laugh in the face.

 

[Scotty_G]

Safest groups are ones that have minimal stipends

 

[pgg]

A couple of factors favor the AMCs ...

They can negotiate better rates with payers because they're large. In essence, they bill and collect more than the anesthesia group can, for doing the same work.

Some are backed by venture capital, and don't necessarily expect to be profitable during their growth and acquisition phases. There's a long and glorious history in every industry, of organizations with deep pockets willingly taking a loss while undercutting the little guy to drive him out of business.


Bottom line: It's hard to compete with a company that gets paid more than you do for the same work, and that doesn't even have to be in the black to stay in business.

 

[Impromptu]

I was told that national groups have backed out of 7 hospitals in the Chicago area over the last 6 months because the profit margins were too small. Part of that is due to Illinois not paying Medicaid bills, but Medicaid pays so little anyway, that this couldn't be the only reason. I think another factor may be that to compete for patients with the surgeon owned surgery centers, the hospitals have to have OR time available later in the days in case the surgeons want to bring a patient there, which is pretty inefficient.