"Mednax: Iffy Business Model, And Q1 2017"

[Carbocation1]

Will there be a resurgence of PP Anesthesia with these AMCs struggling?

Mednax: Iffy Business Model, And Q1 2017 - Mednax, Inc. (NYSE:MD) | Seeking Alpha

Mednax: Iffy Business Model, And Q1 2017
Jun. 5.17 | About: Mednax, Inc. (MD)

Summary
MEDNAX is built upon a consolidation model, one that has not seen any operating leverage generated over the past four years.

Q1 2017 results proved that the business is, however, susceptible to significant margin contraction when trends move against the company.

The company has a weak reputation with its own staff and independent doctors, mostly due to lower-than-average pay - likely done to keep up margins.

If trends continue, there is 15-20% downside to shares from current levels, with further weakness possible.

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[deleted126335]

Good that they are struggling. Bad that they will lean even more on their physicians.

 

[Noyac]

No surprises there!!!!

 

[nimbus]

This criticism can can be applied to any publicly traded AMC. None of them grow their business organically. They all grow by acquisition.

 

[AdmiralChz]

I was under the impression MEDNAX, when you compare them to Team Health or Sheridan, is much more fair. I'm not working for an AMC after graduation, but I've been told by some if you have to then MEDNAX sometimes isn't bad.

Also possibly unique about MEDNAX is that they are involved with a ton of pediatrics and subspecialty peds groups (many NICUs are staffed by them). It's possible that these other groups contribute to the company's downturn. I do not know about the makeup of the other large AMCs.

 

[Pharmado]

I was interested in going to Tennessee to practice after residency. mednax owns large portions of Tennessee, and unfortunately they are the areas I was looking at. I spoke with one of their divisions and I used that phone call to convince my wife that AMC's were evil and we should avoid them at all costs. She didn't believe me until I told her how little they were offering (4 years to "pay equalization" with starting salary at 230k in an ACT model). That sufficed to convince the wife that I shouldn't even waste my time talking to the AMC's in the future. At the same time I had applied to another of their divisions. I didn't get any response for about 2 months. Needless to say I didn't return the call when they finally did get around to talking to me. Besides having unchangeable family ties (divorced with kids, family member on deaths door etc) I can't see any reason why people work for mednax, at least not the group I talked to.

 

[sevoflurane]

I was interested in going to Tennessee to practice after residency. mednax owns large portions of Tennessee, and unfortunately they are the areas I was looking at. I spoke with one of their divisions and I used that phone call to convince my wife that AMC's were evil and we should avoid them at all costs. She didn't believe me until I told her how little they were offering (4 years to "pay equalization" with starting salary at 230k in an ACT model). That sufficed to convince the wife that I shouldn't even waste my time talking to the AMC's in the future. At the same time I had applied to another of their divisions. I didn't get any response for about 2 months. Needless to say I didn't return the call when they finally did get around to talking to me. Besides having unchangeable family ties (divorced with kids, family member on deaths door etc) I can't see any reason why people work for mednax, at least not the group I talked to.

One Mednax location isn't the same as another, that is for sure. I think that @BLADEMDA has hinted at this.
Some are ACT, some are MD only, some are a hybrid of the two.
In your instance, you can make twice that much at another mednax location without a buy-in. 400k +/- from day one in an MD only practice for example. Not unusual.
As far as the strategics are concerned, I feel that Mednax is far superior to the other AMCs out there.
The only exception might be USAP if you were early to get in on the game.
Our group merged and they have been very hands off and have supported us along the way. No changes.
We still run our group like we ran it before. So far, they have been very good to us so absolutely no complaints.
Just something to keep in mind. Not all locations are the same.
The practice and leadership that was there before a merger has a lot to do with the post merger job description.
Just my 2 cents.

 

[aneftp]

I was under the impression MEDNAX, when you compare them to Team Health or Sheridan, is much more fair. I'm not working for an AMC after graduation, but I've been told by some if you have to then MEDNAX sometimes isn't bad.

Also possibly unique about MEDNAX is that they are involved with a ton of pediatrics and subspecialty peds groups (many NICUs are staffed by them). It's possible that these other groups contribute to the company's downturn. I do not know about the makeup of the other large AMCs.

It's all local how malignant AMC can be run. Not all practices run by even the same AMC is the same.

Especially in friendly buyouts. They let the local group practice run its own show as long as they operate within the budget set (the pot). AMCs don't care who's taking which calls, who's working late or who's not working late. They let the friendly buyout practice do whatever they want (within reason). Of course many of these original practices that sold out have some scammers who want their cake and eat it too.

Like the Lawrenceville Ga mednax facility thu tried to get some suckers to be "fulltime" but fulltime as meaning u be working 7pm-7am Friday Saturday and Sunday nights. Sheridan practice in orlando tried to pull the same stunt doing the 7pm-7am weekend as "full time"

 

[aneftp]

One Mednax location isn't the same as another, that is for sure. I think that @BLADEMDA has hinted at this.
Some are ACT, some are MD only, some are a hybrid of the two.
In your instance, you can make twice that much at another mednax location without a buy-in. 400k +/- from day one in an MD only practice for example. Not unusual.
As far as the strategics are concerned, I feel that Mednax is far superior to the other AMCs out there.
The only exception might be USAP if you were early to get in on the game.
Our group merged and they have been very hands off and have supported us along the way. No changes.
We still run our group like we ran it before. So far, they have been very good to us so absolutely no complaints.
Just something to keep in mind. Not all locations are the same.
The practice and leadership that was there before a merger has a lot to do with the post merger job description.
Just my 2 cents.

Yup. Just like what I just explained.

So u are right. Ur mileage will vary with AMCs. Don't put a glove fits all and paint one AMC fits into this category.

The reason mednax and now usap seem "better" is because there buyout practices usually had good payer mix. Duh. That's why they were profitable. Cause of payor mix.

But now there are only so many "good" groups one can buy. Eventually in order to maintain market share. U gotta take over some iffy practices with poor payor mix and run it even leaner. But with poor payor mix and less subsidy (or no subsidy), you can only run it so lean

That's why it's so ironic these AMC preach "efficiency" but it really comes down to payor mix. I don't care how efficient you are. If u got self pay and Medicaid and Medicare patient taking over 70-80% of the payer mix. U got very little room for profitability

 

[Mman]

That's why it's so ironic these AMC preach "efficiency" but it really comes down to payor mix. I don't care how efficient you are. If u got self pay and Medicaid and Medicare patient taking over 70-80% of the payer mix. U got very little room for profitability

In medicine it always come down to payor mix. For AMCs, their business model is built on having higher negotiated rates than the groups they take over so they can collect more dollars for the same amount of work being done and just take that as their margin. The problem as you point out is they started out by taking over the prime locations that generated the biggest margins. As you go down the line, the margins get thinner and thinner because at some point it doesn't matter how high your rates are if you are taking care of mostly CMS patients.

 

[Stank811]

Will there be a resurgence of PP Anesthesia with these AMCs struggling?

Mednax: Iffy Business Model, And Q1 2017 - Mednax, Inc. (NYSE:MD) | Seeking Alpha

Mednax: Iffy Business Model, And Q1 2017
Jun. 5.17 | About: Mednax, Inc. (MD)

Summary
MEDNAX is built upon a consolidation model, one that has not seen any operating leverage generated over the past four years.

Q1 2017 results proved that the business is, however, susceptible to significant margin contraction when trends move against the company.

The company has a weak reputation with its own staff and independent doctors, mostly due to lower-than-average pay - likely done to keep up margins.

If trends continue, there is 15-20% downside to shares from current levels, with further weakness possible.

PP or hospital employment opportunities. AMC played on the fears of a changing healthcare environment to make a quick buck and as the article states they are dependent on a consolidation environment which there has already been a retraction in consolidation in the anesthesia market and all AMC will continue to struggle to recruit until they offer fair packages.

 

[Carbocation1]

Circling the drain -

Decision Time: Mednax, Inc (NYSE:MD) Stock Technicals Hit Inflection Point

2017-06-18
"Decision Time: Mednax, Inc (NYSE:MD) now sits in the perhaps the most difficult technical position -- the stock has no urgency in its direction and that has left it at an inflection point."

Decision Time: Mednax, Inc (NYSE:MD) Stock Technicals Hit Inflection Point - CML News