Independent PP groups can provide a better value than an AMC

[Ignatius J]

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within 100 miles of me the median is > $150.

On the 2015 ASA survey of commercial rates, rates were reported as high as $195 a unit with several in the $150 range. AMCs aren't even part of this data. You think they get less than the high end of the private group ranges?

You are now walking your comment back. Thanks for that.

 

[Lurch]

I think the point remains the same whether it is "merging" pp groups for better negotiating power, forming a regional network accomplishing the same, or unionizing within an employee model, it will take anesthesiologists moving forward collectively and exhibiting solidarity to accomplish anything from here on.

 

[GravelRider]

They don't just say it, but they essentially have to. The way you negotiate with an insurance company is you threaten to go out of network if they don't meet your demands. When that happens, every one of their patients gets a big bill from you for your full charge and then they have to personally pay it and later seek reimbursement from their insurance company. It's hard on you since your time to collection goes up and your collection rate may go down, but it's terrible for the insurance company. Their patients revolt and they likely lose business as employers switch to other insurance companies. We went out of network once and they've never batted on eye on our demands since.

You think they will risk going out of network with an AMC that covers a huge number of cases? Zero chance.

It's all about negotiating and the more cases you do per year, the more leverage you have. AMCs have massive leverage.

Going "out of network" was made illegal in New York State. I'm sure there are other states like this. Again, the east coast is about 5 years ahead of the rest of you, but it's coming...

http://www.dfs.ny.gov/consumer/hprotection.htm

 

[Mman]

You are now walking your comment back. Thanks for that.

nope. stand by it. and have numbers from Mednax, NAPA, and private equity firm that all jive with it.

 

[Mman]

so much Koolaid!

ain't Koolaid if it's true and I know several groups that have done just that

 

[nimbus]

As a Californian $150-190 unit values sound insane. What's the average unit value in a practice like that? Over $100/unit? Are there still pockets of 7 figure income with good lifestyles out there? I need to move.

 

[deleted162650]

As a Californian $150-190 unit values sound insane. What's the average unit value in a practice like that? Over $100/unit? Are there still pockets of 7 figure income with good lifestyles out there? I need to move.

Seriously. At >$100/unit and supervising 3+ rooms how are you not making $1.5mil/yr????

 

[BLADEMDA]

Seriously. At >$100/unit and supervising 3+ rooms how are you not making $1.5mil/yr????

There are just a few practices with an average collection per unit of $80.00. Perhaps, 3-4 on the East Coast still independent. I suspect more in the Midwest than anywhere else in the nation.

And yes, if the average collection per unit exceeds $80 per unit they are likely 7 figure incomes for the partners.

 

[Mman]

As a Californian $150-190 unit values sound insane. What's the average unit value in a practice like that? Over $100/unit? Are there still pockets of 7 figure income with good lifestyles out there? I need to move.

Depends equally on payer mix. If you have 50% commercial at those rates, then yes you are killing it. If it's 30% commercial, it's not quite as lucrative (though still pretty nice).

 

[Ignatius J]

Seriously. At >$100/unit and supervising 3+ rooms how are you not making $1.5mil/yr????

When things don't add up....

 

[Mman]

Going "out of network" was made illegal in New York State. I'm sure there are other states like this. Again, the east coast is about 5 years ahead of the rest of you, but it's coming...

http://www.dfs.ny.gov/consumer/hprotection.htm

So that link doesn't look like going out of network is illegal in NY. They can't require you to participate in every insurance plan. It appears that what they do, though, is require that your bill out of network isn't drastically different than what you bill other plans with which you participate.

 

[Mman]

When things don't add up....

what doesn't add up? There are private groups with all partners that make >$1M per doc. How do you think they get there?

 

[Ignatius J]

what doesn't add up? There are private groups with all partners that make >$1M per doc. How do you think they get there?

Not really going to argue this further. I have hard data that suggests your statement of AMCs making a median of greater than $150/unit is absolutely, completely, ridiculously incorrect in every sense of the word.

 

[GravelRider]

So that link doesn't look like going out of network is illegal in NY. They can't require you to participate in every insurance plan. It appears that what they do, though, is require that your bill out of network isn't drastically different than what you bill other plans with which you participate.

Semantics

It's not illegal, but it is against the rules.

 

[Mman]

Not really going to argue this further. I have hard data that suggests your statement of AMCs making a median of greater than $150/unit is absolutely, completely, ridiculously incorrect in every sense of the word.

so you have hard data that you can't share with us? Because I have hard data from 2 AMCs and from a private equity firm that NAPA wanted to partner with that suggest it is 100% correct.

 

[Mman]

Semantics

It's not illegal, but it is against the rules.

against what rule? That law seems to say it's perfectly fine to be out of network, it just provides a mechanism for review of the bill if it's too high compared to what you charge everyone else.

 

[GravelRider]

against what rule? That law seems to say it's perfectly fine to be out of network, it just provides a mechanism for review of the bill if it's too high compared to what you charge everyone else.

Ok, not illegal...highly discouraged, not advantageous, not an option (for anesthesiologists). However you want to word it, going "out of network" is not a bargaining chip an anesthesia group can use...at least not in New York...because people don't choose their anesthesiologist. That's the point.

 

[Scotty_G]

I think there are still a decent amount of places with high blended unit just not as many large practices. Including in the westcoast...

 

[Ignatius J]

so you have hard data that you can't share with us? Because I have hard data from 2 AMCs and from a private equity firm that NAPA wanted to partner with that suggest it is 100% correct.

Theoretically, yes. But I cannot for a few different reasons that I will not go into. You can say what you like, and I won't stop you. But you are incorrect.

 

[deleted162650]

Theoretically, yes. But I cannot for a few different reasons that I will not go into. You can say what you like, and I won't stop you. But you are incorrect.

Rates vary quite a bit by region. So unless you 2 guys are in the exact same locale it's very possible that you are both correct.

 

[Mman]

Ok, not illegal...highly discouraged, not advantageous, not an option (for anesthesiologists). However you want to word it, going "out of network" is not a bargaining chip an anesthesia group can use...at least not in New York...because people don't choose their anesthesiologist. That's the point.

I'd still do it in NY if you had all good contracts and 1 insurer was trying to stiff you with a bad rate.

 

[Ignatius J]

Rates vary quite a bit by region. So unless you 2 guys are in the exact same locale it's very possible that you are both correct.

I have no doubt those rates may happen where he is. I have seen and heard of places that get far above $150, usually for a noted exceptional reason. They are far more the exception than the rule. The notion that all these AMCs throughout the country get a median of greater than $150/unit is blatantly incorrect though.

 

[Mman]

I have no doubt those rates may happen where he is. I have seen and heard of places that get far above $150, usually for a noted exceptional reason. They are far more the exception than the rule. The notion that all these AMCs throughout the country get a median of greater than $150/unit is blatantly incorrect though.

the AMCs have more case volume in the places with higher rates. They are far less interested in acquiring locations where they have lower rates.

 

[Ignatius J]

the AMCs have more case volume in the places with higher rates. They are far less interested in acquiring locations where they have lower rates.

Not true and misleading.

 

[Mman]

Not true and misleading.

really? do they just lie about it then? are their numbers made up for outside investors?

 

[Ignatius J]

really? do they just lie about it then? are their numbers made up for outside investors?

Like I said, not here to argue because I'm not privy to divulge what all I know. You are flat wrong. All there is to it. I doubt you are making stuff up. More than likely you have been given a small sample size and are extrapolating too far. You most definitely are not in a major city or I actually do think are just flat making stuff up or being straight lied to.

 

[Stank811]

Not true and misleading.

Are you suggesting they have a larger percentage of poor reimbursement practices?

 

[Mman]

Like I said, not here to argue because I'm not privy to divulge what all I know. You are flat wrong. All there is to it. I doubt you are making stuff up. More than likely you have been given a small sample size and are extrapolating too far. You most definitely are not in a major city or I actually do think are just flat making stuff up or being straight lied to.

for someone not here to argue you sure like to repeat yourself. Like I said, I have proof you are wrong. 100%. From the horses mouth through 2 different and unrelated avenues. But that's OK, you don't want to argue.

NAPA is heavily concentrated in the Northeast and Mednax is overwhelmingly in the Midwest and Southeast. Those are basically the 3 best areas of the country for reimbursement and they both kill it.

 

[Ignatius J]

for someone not here to argue you sure like to repeat yourself. Like I said, I have proof you are wrong. 100%. From the horses mouth through 2 different and unrelated avenues. But that's OK, you don't want to argue.

NAPA is heavily concentrated in the Northeast and Mednax is overwhelmingly in the Midwest and Southeast. Those are basically the 3 best areas of the country for reimbursement and they both kill it.

With median unit value greater than $150 from private insurers?

 

[Ignatius J]

Are you suggesting they have a larger percentage of poor reimbursement practices?

I'm suggesting he is generalizing stuff.

 

[Stank811]

I'm suggesting he is generalizing stuff.

Would you say it is fair to say that most AMCs that you have seen have a blended unit around 60-80? With a blended unit of 60-80 dollars/unit and average production from each provider they would bill 900,000-1.2 million. And then the AMC pays the anesthesiologist 300-400k total package....overhead for each provider at most in my opinion should be around 10% (which includes all the QCDR and patient surveys that AMC proclaim to be so important). So where does the extra 400-600k/per provider go?

 

[GravelRider]

...And then the AMC pays the anesthesiologist 300-400k total package....overhead for each provider at most in my opinion should be around 10% (which includes all the QCDR and patient surveys that AMC proclaim to be so important). So where does the extra 400-600k/per provider go?

They donate it to the poor.

 

[Ignatius J]

Would you say it is fair to say that most AMCs that you have seen have a blended unit around 60-80? With a blended unit of 60-80 dollars/unit and average production from each provider they would bill 900,000-1.2 million. And then the AMC pays the anesthesiologist 300-400k total package....overhead for each provider at most in my opinion should be around 10% (which includes all the QCDR and patient surveys that AMC proclaim to be so important). So where does the extra 400-600k/per provider go?

Yup. Good question. You see the light. When 1 + 1 = 4, something doesn't make sense.

People think these guys are really getting 400-600K return on investment per provider?

You give 5 big wigs 10 million each in a 40 person group and you're making:

500K per provider per year X 40 employees = 20 mil/year

20 mill/ initial buyout of 50 million = 40% ROI.

Yeahhhhhh, right.

 

[Stank811]

Yup. Good question. You see the light. When 1 + 1 = 4, something doesn't make sense.

People think these guys are really getting 400-600K return on investment per provider?

You give 5 big wigs 10 million each in a 40 person group and you're making:

500K per provider per year X 40 employees = 20 mil/year

20 mill/ initial buyout of 50 million = 40% ROI.

Yeahhhhhh, right.

Or why selling to an AMC to secure your retirement is not in the best interest of the profession moving forward.

 

[repititionition]

I think the point remains the same whether it is "merging" pp groups for better negotiating power, forming a regional network accomplishing the same, or unionizing within an employee model, it will take anesthesiologists moving forward collectively and exhibiting solidarity to accomplish anything from here on.

This model is well-established in other parts of health care, and in other industries as well.

It would take a lot of work to get it set up, but the concept of the Group Purchasing Organization (GPO) would be an incredibly powerful change in anesthesiology.

 

[aneftp]

the AMCs have more case volume in the places with higher rates. They are far less interested in acquiring locations where they have lower rates.

Yes and no. AMC like mednax which at the beginning cherry picked the most profitable groups now will try to acquire (or steal contracts) almost any practice and willing to bleed a little. It's just how they spin it to investors being publically traded. If stock price goes up it doesn't matter if they bleed a few hundred thousand at a newly acquired poor payer mix

 

[sevoflurane]

I'm suggesting he is generalizing stuff.

I would agree that his experience is unique.

 

[sevoflurane]

Napa sucks...

 

[Scotty_G]

I hate NAPA the worst because they started where I grew up!

 

[Scotty_G]

Ignatius I previously said the priv group that I did part of my training was bought out by Sheridan and the avg unit value is over 100. Prior to that it was still high... (NE)

 

[Mman]

I'm suggesting he is generalizing stuff.

NAPA was hunting for a private equity "partner" for the last 2-3 years. They had to put out their financial data to those, including 1 that I consult for, so I've seen the math with my own eyes. Mednax, on the other hand, publicly reports much of their financial info with which you can do some math and it corroborates the actual data I've seen on their rates in several states.

 

[deleted162650]

NAPA was hunting for a private equity "partner" for the last 2-3 years. They had to put out their financial data to those, including 1 that I consult for, so I've seen the math with my own eyes. Mednax, on the other hand, publicly reports much of their financial info with which you can do some math and it corroborates the actual data I've seen on their rates in several states.

How does one go about getting these consulting gigs?

 

[Ignatius J]

NAPA was hunting for a private equity "partner" for the last 2-3 years. They had to put out their financial data to those, including 1 that I consult for, so I've seen the math with my own eyes. Mednax, on the other hand, publicly reports much of their financial info with which you can do some math and it corroborates the actual data I've seen on their rates in several states.

Please post financial numbers. I'm open to seeing them.

 

[pjl]

Please post financial numbers. I'm open to seeing them.

The fact that he is saying as much as he is would be more than most are willing to say. These gigs have pretty strict confidentiality agreements.


Sent from my iPad using SDN mobile app

 

[Ignatius J]

The fact that he is saying as much as he is would be more than most are willing to say. These gigs have pretty strict confidentiality agreements.


Sent from my iPad using SDN mobile app

Trust me. I know. 🙂

 

[Mman]

How does one go about getting these consulting gigs?

A first degree relative of mine is a director and in exchange for consultation relating to health care acquisitions I get their fees waived for my personal investments. Aside from a personal connection I have no earthly idea how one gets a foot in that door. And yes, the NDAs are kinda strict.