Mednax

[Regurgitant Jet]

Hello, everyone! I'm a new member but long-time lurker on SDN. I wanted to see if anyone has any information on Mednax. I found a couple of threads from 2010 but nothing more recent. Given the ever increasing trend towards physician employment, I wanted to see if anyone else has had any experience with working for this company. I was supposed to enter a partnership track position, but my future group is looking at selling to Mednax - leaving me as a salaried employee with no stake in the buyout. This is obviously a lousy situation, but I am committed to the geographic location and may not have any other good options for employment. It seems like more and more groups are looking at physician management companies due to the potential impact of ACOs and bundled payments on income, so this type of practice model may be inevitable for most of us one day, but this definitely isn't how I had envisioned my future in medicine. I am particularly concerned about quality of care in this model as well as long-term job and income security. Any information would be greatly appreciated. Thanks!

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[BLADEMDA]

Hello, everyone! I'm a new member but long-time lurker on SDN. I wanted to see if anyone has any information on Mednax. I found a couple of threads from 2010 but nothing more recent. Given the ever increasing trend towards physician employment, I wanted to see if anyone else has had any experience with working for this company. I was supposed to enter a partnership track position, but my future group is looking at selling to Mednax - leaving me as a salaried employee with no stake in the buyout. This is obviously a lousy situation, but I am committed to the geographic location and may not have any other good options for employment. It seems like more and more groups are looking at physician management companies due to the potential impact of ACOs and bundled payments on income, so this type of practice model may be inevitable for most of us one day, but this definitely isn't how I had envisioned my future in medicine. I am particularly concerned about quality of care in this model as well as long-term job and income security. Any information would be greatly appreciated. Thanks!

Your future group's partners are going to get rich selling to Mednax. They will then have to agree to work for American Anesthesiology/Mednax for a number of years (3-5) at a set salary ($300-350) before being allowed to leave the group and retire in luxury.

You,on the other hand, are just a cog in the wheel of an AMC. This is not a place to create a career but if you can't find anything else, are poorly trained/marginal or must practice at that location/area then working for Mednax is for you.

I can see AMCs being popular for an easy job, semi retired Anesthesiologist or mommy track doctor but this type of job is Not for a hungry, tier 1 or 2 Anesthesiologist looking to make his/her mark

 

[darby11]

LOL

All anesthesiologists are the same.. LOL. tier 1 or mommy track. Put the crack pipe down if you think somehow you are diff from anyone else.. put the tube in look for etc02.. whats the problem?? you need a hungry tier1 anesthesiologist for that.. settle down turbo...

 

[jetproppilot]

....

edited my initial post secondary to me being an

IDIOT.

 

[Oggg]

Some people just want to put the tube in and then do crosswords. They avoid the tough cases, can't be bothered to learn anything new like TEE, regional, ultrasound, etc. Whining all the time. Calling for help when their capnograph line is loose. Some anesthesiologists plain suck, and if you have any around you, count yourself lucky.

 

[deleted126335]

LOL

All anesthesiologists are the same.. LOL. tier 1 or mommy track. Put the crack pipe down if you think somehow you are diff from anyone else.. put the tube in look for etc02.. whats the problem?? you need a hungry tier1 anesthesiologist for that.. settle down turbo...

Spoken like the poorly trained or marginal anesthesiologist that Blade referred to.

There is a distribution curve in every profession in ability, education, and work ethic.

It is very clear which side of the curve that you are on.

 

[IlDestriero]

They're out there, and not too hard to find. Lazy, questionably trained, work dodging, weird plan generating, poorly communicating, shady, inattentive, easily distracted, cowboy, bad in a crisis, MARGINAL anesthesiologists.
There are anesthesiologists that I worked with that I would never, ever, recommend to anyone. And the surgeons know it too.
That ain't tier one.
There's a reason that some people refuse to turn their reasonably complex, but stable, cases over at the end of the day, staying an hour or more later than they have to. If you find that happening to you with some regularity, or find everyone else is getting assigned to the monster cases while you routinely cover GI, ENT and MRI, it's time for some introspection.
Mommy track doesn't make you marginal, but it does limit your potential, and depending on how you're utilized, can lead to skill atrophy.

Cheers!

 

[Trisomy13]

SCREEN NAME????

You're an idiot.

If that's your creativity threshold,

TAKE THE MOMMY TRACK,

MA'AM.

Settle down, Beavis.

Do you really assume his screen name is an attack on you and not the physiological occurence observed on TEE in our practice?

Someone comes in asking a question about his situation with his career and impending AMC takeover and you call him an idiot. Not to mention using "ma'am" as an insult. Very telling.

Thanks for contributing!

 

[deleted126335]

Settle down, Beavis.

Do you really assume his screen name is an attack on you and not the physiological occurence observed on TEE in our practice?

Someone comes in asking a question about his situation with his career and impending AMC takeover and you call him an idiot. Not to mention using "ma'am" as an insult. Very telling.

Thanks for contributing!

I think that Jet was responding to darby and not regurgitant jet.

I agree with his response if directed @ darby.
I disagree if directed @ regurgitant jet.

 

[aneftp]

Wow you guys are tough here.

To be honest, to say all GI/MRI/CT anesthesia cases are handled with lower skilled anesthesiologists is generalizing the difficulty of some of these procedures.

350 pound morbidly obese obtunded woman s/p aneurysm rupture, who just delivered baby 10 hours ago for a interventional neuro radiology/coiling under general anesthesia is not an easy case.

Getting back to American Anesthesiology/whatever they call themselves/subsidy. One of my friend's group sold themselves out to this company. The older partners all got 7 figure buyouts. He got close to a 7 figure buyout himself (being 4 years into the partnership).

American Anesthesiology of all the management companies tends to buyout more successful groups and pay top dollar for them. My friend's group had 80% of partners from Ivy League institutions, rarely hired anyone, very low turnover. It takes a lot to get hired for this group.

My sister's group was approached by both Sheridan and American Anesthesiology, American Anesthesiology's offer was much higher than Sheridan. She and her partners declined the offer last year but the offer is still on the table. It really depends on how old the partners are and their time table whether to sell out.

My friend is satisfied with the American Anesthesiology. Benefits are very good. Pay is still very good considering market conditions. Working conditions are excellent.

Many people need to consider that it's a rough world out there with private practice/fee for service. Many of my friends up north used to make 500K and up, all working 60 plus hours a week. Payer mix is always changing dramatically. Now they still work 60 plus hours a week and barely rake in mid 300s (that's with zero benefits also).

With management companies, there is an understanding you will average "X" amount of hours per week. Usually low 50s. My friend has a guaranteed income for "X" amount of years. But it's a lot longer than what most people think.

 

[Trisomy13]

I think that Jet was responding to darby and not regurgitant jet.

I agree with his response if directed @ darby.
I disagree if directed @ regurgitant jet.

Well yeah now that you point that out... oh well. Not the first time I looked stupid on the internet and won't be the last.

 

[BLADEMDA]

Wow you guys are tough here.

To be honest, to say all GI/MRI/CT anesthesia cases are handled with lower skilled anesthesiologists is generalizing the difficulty of some of these procedures.

350 pound morbidly obese obtunded woman s/p aneurysm rupture, who just delivered baby 10 hours ago for a interventional neuro radiology/coiling under general anesthesia is not an easy case.

Getting back to American Anesthesiology/whatever they call themselves/subsidy. One of my friend's group sold themselves out to this company. The older partners all got 7 figure buyouts. He got close to a 7 figure buyout himself (being 4 years into the partnership).

American Anesthesiology of all the management companies tends to buyout more successful groups and pay top dollar for them. My friend's group had 80% of partners from Ivy League institutions, rarely hired anyone, very low turnover. It takes a lot to get hired for this group.

My sister's group was approached by both Sheridan and American Anesthesiology, American Anesthesiology's offer was much higher than Sheridan. She and her partners declined the offer last year but the offer is still on the table. It really depends on how old the partners are and their time table whether to sell out.

My friend is satisfied with the American Anesthesiology. Benefits are very good. Pay is still very good considering market conditions. Working conditions are excellent.

Many people need to consider that it's a rough world out there with private practice/fee for service. Many of my friends up north used to make 500K and up, all working 60 plus hours a week. Payer mix is always changing dramatically. Now they still work 60 plus hours a week and barely rake in mid 300s (that's with zero benefits also).

With management companies, there is an understanding you will average "X" amount of hours per week. Usually low 50s. My friend has a guaranteed income for "X" amount of years. But it's a lot longer than what most people think.

1. The buyout by Mednax is at least 2 million per partner (more with productivity bonuses and stock options).

2. The salary for the former partners is agreed by both parties. Usually $350K plus basic benefit package and bonus opportunity based on productivity.

3. Junior Assocates get screwed over in this deal while senior partners (50 years plus) make out like bandits.

4. AMCs may indeed be the future of anesthesia but it is a bleak HMO type future. After the AMC era will come the hospital employed model.

 

[jwk]

Getting back to American Anesthesiology/whatever they call themselves/subsidy. One of my friend's group sold themselves out to this company. The older partners all got 7 figure buyouts. He got close to a 7 figure buyout himself (being 4 years into the partnership).

American Anesthesiology of all the management companies tends to buyout more successful groups and pay top dollar for them. My friend's group had 80% of partners from Ivy League institutions, rarely hired anyone, very low turnover. It takes a lot to get hired for this group.

My friend is satisfied with the American Anesthesiology. Benefits are very good. Pay is still very good considering market conditions. Working conditions are excellent.

Interesting - the folks I've talked to that have been bought out by them have a different opinion entirely. Benefits are far lower than what they had. And they have forever lost their ability to control their own destiny in a place that some of them had been for more than 20 years. Now they're simply an employee and many regret the move.

 

[BLADEMDA]

Interesting - the folks I've talked to that have been bought out by them have a different opinion entirely. Benefits are far lower than what they had. And they have forever lost their ability to control their own destiny in a place that some of them had been for more than 20 years. Now they're simply an employee and many regret the move.

At age 50 I'd take the buyout. At age 35 it is a bad deal.

 

[Mman]

1. The buyout by Mednax is at least 2 million per partner (more with productivity bonuses and stock options).

2. The salary for the former partners is agreed by both parties. Usually $350K plus basic benefit package and bonus opportunity based on productivity.

3. Junior Assocates get screwed over in this deal while senior partners (50 years plus) make out like bandits.

4. AMCs may indeed be the future of anesthesia but it is a bleak HMO type future. After the AMC era will come the hospital employed model.

This information is incorrect. I know. Mednax offered to buy our group and we turned them down.

What they do is look at the income of the group per partner the last several years. They then offer each partner basically that same income over the next however many years (usually 5 or so) divided into a lower annual salary and a larger upfront cash payment as a stock option (taxed at 15%). So you get the same amount of money for the 5 year period, but a good portion of it upfront and at a lower tax rate. When that 5 years is up, they are free to replace you as needed and/or change (lower) your salary.

It's a great deal for partners nearing retirement. They lower their effective tax rate and lock in a good salary for 5 years. After that it's not so great a deal so anybody further from retirement is going to not be as happy about the deal. But even if you were 7 or 8 years out from retiring, the large sum of cash taxed as capital gains can still make it worthwhile in the longrun.


But to the OPs question, MedNax will see you as an employee that they will pay market rate for. If somebody else can do it cheaper, they can/will hire somebody else.

 

[aneftp]

At age 50 I'd take the buyout. At age 35 it is a bad deal.

Yep 100% agree. It all depends on your age and your future earnings and frankly your goals in life.

Small businesses (as Medicine is all business) all make money when they sell out.

Think about it. Most of us really only need around 2-3 million to retire if we are age 55 year old. This is assuming the home is all paid for and the kids are all about to get out of college and be on their own.

Most people can live quite comfortable off $50-75K a year if no house payment is needed.

The million dollar question is: How much will health care cost until you are 65 years old for medicare.

 

[seinfeld]

What everyone is assuming is that private practice anesthesia will be an option. I hope it still is an option in 15 years but In areas with high medicare rates or in areas where, regardless of the supreme courts ruling, shared cost (ACO) models predominate employment in some form will be the norm.

I know everyone talks about employment as a 4 letter word but very few people in the world make money and are not employed. Look at all the academic anesthesiologists out there, most all are employed by the university. My group currently "employs" 5 physicians itself, they are the most happy docs in our practice despite their lower pay.

I think the real question we should be debating; "Is working for an AMC better than working for a hospital" Honestly i feel you would have more power working directly for a hospital than working for an AMC.

What i think groups who are selling out are figuring on is the inevitable employment model. And if they are to be employed why not take some cash up front at capital gains. Would it really be that bad for the younger partners? Does anyone believe we will be making more money in the future?

As far the originals posters question, i have no idea how they are to work for. I am an owner in a private group and don't plan on changing that .

 

[BLADEMDA]

This information is incorrect. I know. Mednax offered to buy our group and we turned them down.

What they do is look at the income of the group per partner the last several years. They then offer each partner basically that same income over the next however many years (usually 5 or so) divided into a lower annual salary and a larger upfront cash payment as a stock option (taxed at 15%). So you get the same amount of money for the 5 year period, but a good portion of it upfront and at a lower tax rate. When that 5 years is up, they are free to replace you as needed and/or change (lower) your salary.

It's a great deal for partners nearing retirement. They lower their effective tax rate and lock in a good salary for 5 years. After that it's not so great a deal so anybody further from retirement is going to not be as happy about the deal. But even if you were 7 or 8 years out from retiring, the large sum of cash taxed as capital gains can still make it worthwhile in the longrun.


But to the OPs question, MedNax will see you as an employee that they will pay market rate for. If somebody else can do it cheaper, they can/will hire somebody else.

You are INCORRECT. Mednax makes different offers to different groups. I know former partners in THREE of their buyouts. Terms differ in all 3 buyouts. They use a multiple of revenue stream per group to determine intial "bonus" payouts. One group got 8 times revenue stream while another got 6 times. You are correct about the 15% tax rate (long term capital gains). By the way these guys were earning $600-$800K each as partners. So, if each gets $400K X 5 years that means the senior partner pocketed over $2 million upfront while still getting paid a nice salary ($300-$350) over the next 5 years. Hence, my post was CORRECT. One more thing the SUPERPARTNERS got even more cash on the side to pursuade the rest to go along (that is the rumour).

Finally, 5 years is the standard term for employment after this type of deal but Mednax has been know to change these terms if they want to buy you out badly enough. This means Mednax will pay you the $2 million upfront taxed at 15% but only make you agree to a 3 year term at current employment for $300K. After 3 years you would have the right to quit and relocate. Remember, Mednax needs your Group to keep growing in order to justify a multiple on its publicly traded stock while you don't really need them.

Mednax= symbol MD on the stock exchange. PE is currently 14.

 

[BLADEMDA]

Mednax has been on a tear the last few years:

1. Fairfax Virginia
2. Charlotte, NC
3. Raleigh, NC
4. Wilmington, NC

I hear they are in discussion with a large group in Baltimore right now.

 

[deleted126335]

You are INCORRECT. Mednax makes different offers to different groups. I know former partners in THREE of their buyouts. Terms differ in all 3 buyouts. They use a multiple of revenue stream per group to determine intial "bonus" payouts. One group got 8 times revenue stream while another got 6 times. You are correct about the 15% tax rate (long term capital gains). By the way these guys were earning $600-$800K each as partners. So, if each gets $400K X 5 years that means the senior partner pocketed over $2 million upfront while still getting paid a nice salary ($300-$350) over the next 5 years. Hence, my post was CORRECT. One more thing the SUPERPARTNERS got even more cash on the side to pursuade the rest to go along (that is the rumour).

Finally, 5 years is the standard term for employment after this type of deal but Mednax has been know to change these terms if they want to buy you out badly enough. This means Mednax will pay you the $2 million upfront taxed at 15% but only make you agree to a 3 year term at current employment for $300K. After 3 years you would have the right to quit and relocate. Remember, Mednax needs your Group to keep growing in order to justify a multiple on its publicly traded stock while you don't really need them.

Mednax= symbol MD on the stock exchange. PE is currently 14.

Blade only touched on something that is of vital importance:

-Good deal for 50+ yr old partners looking for a little security in uncertain times as they hope to transition into retirement.
-The deal of a lifetime for super partners with enhanced voting rights.


-I wouldn't buy the stock. I would bet big bucks that these practices become less efficient and profitable going forward. No matter the incentive metrics put in place. There is a big difference between an owner with a lifetime investment in the practice hustling to placate surgeons, mollifying administrators, Looking hard to get employees out on time so no overtime is incurred, etc. and an EMPLOYEE who will take on some aspects of a civil sevant.

 

[Mman]

You are INCORRECT. Mednax makes different offers to different groups. I know former partners in THREE of their buyouts. Terms differ in all 3 buyouts. They use a multiple of revenue stream per group to determine intial "bonus" payouts. One group got 8 times revenue stream while another got 6 times. You are correct about the 15% tax rate (long term capital gains). By the way these guys were earning $600-$800K each as partners. So, if each gets $400K X 5 years that means the senior partner pocketed over $2 million upfront while still getting paid a nice salary ($300-$350) over the next 5 years. Hence, my post was CORRECT. One more thing the SUPERPARTNERS got even more cash on the side to pursuade the rest to go along (that is the rumour).

Finally, 5 years is the standard term for employment after this type of deal but Mednax has been know to change these terms if they want to buy you out badly enough. This means Mednax will pay you the $2 million upfront taxed at 15% but only make you agree to a 3 year term at current employment for $300K. After 3 years you would have the right to quit and relocate. Remember, Mednax needs your Group to keep growing in order to justify a multiple on its publicly traded stock while you don't really need them.

Mednax= symbol MD on the stock exchange. PE is currently 14.

I am friends with current superpartners in 3 of their large recent acquisitions. I know exactly how they make their offer. They don't offer $2 million plus lump sums of cash plus a salary. They just shift your total income over 5 years to be mostly upfront at a lower tax rate. The actual amount of the initial lump sum is determined by the profitability of the group as well as the number of partners it is split amongst. Pyramid schemes with multiple levels of partners are obviously the easiest for them to buy out because they can give more money to fewer people and screw the rest.

What they essentially do is just guarantee current income for partners for another 5 years with the benefit of the capital gains rate on the initial lump sum and in return they get longterm ability to drop salaries and screw everyone down the road.

We decided that if their company feels strongly enough in the future profitability of anesthesia than we really shouldn't be selling.

 

[BLADEMDA]

I am friends with current superpartners in 3 of their large recent acquisitions. I know exactly how they make their offer. They don't offer $2 million plus lump sums of cash plus a salary. They just shift your total income over 5 years to be mostly upfront at a lower tax rate. The actual amount of the initial lump sum is determined by the profitability of the group as well as the number of partners it is split amongst. Pyramid schemes with multiple levels of partners are obviously the easiest for them to buy out because they can give more money to fewer people and screw the rest.

What they essentially do is just guarantee current income for partners for another 5 years with the benefit of the capital gains rate on the initial lump sum and in return they get longterm ability to drop salaries and screw everyone down the road.

We decided that if their company feels strongly enough in the future profitability of anesthesia than we really shouldn't be selling.

You are splitting hairs. The partners get 2 million dollars then a salary for 5 years.
Your total income after 5 years is based on CAMELOT LEVEL COLLECTIONS in terms of revenue, payer mix, etc. so "shifting your income forward" to me means big money I may or may not earn down the road. I doubt income in 5 years is as good as it is today based on everything going on in healthcare.


Super Partners have more voting rights and can essentially force these types of deals on other partners.

Mednax has CFO, Accountants, etc and if they want you badly enough the deal can be sweetened a bit. But, you wouldn't know about that because you never countered their offer.

Finally, at my age and situation I would take such a deal in a nanosecond. At your age I don't blame you for holding out and hoping Obamacare along with Obama's re-election goes down in flames.

Doze is correct about these "buyouts" going forward. Employees rarely work as hard or care as much as owners.

MEDNAX is simply ENRON. Give it 5 years.

 

[drccw]

Mednax has been on a tear the last few years:

1. Fairfax Virginia
2. Charlotte, NC
3. Raleigh, NC
4. Wilmington, NC

I hear they are in discussion with a large group in Baltimore right now.

Baltimore? Wonder what group that is....
NAPA is at Sinai. They were at St. Agnes but they got kicked out...
The only large group I can think of would be the group at GBMC.... my impression is that GBMC's group is stuggling.. surgeries are down at their hospital and the group is fighting to do outpatient work....

drccw

 

[BLADEMDA]

I am friends with current superpartners in 3 of their large recent acquisitions. I know exactly how they make their offer. They don't offer $2 million plus lump sums of cash plus a salary. They just shift your total income over 5 years to be mostly upfront at a lower tax rate. The actual amount of the initial lump sum is determined by the profitability of the group as well as the number of partners it is split amongst. Pyramid schemes with multiple levels of partners are obviously the easiest for them to buy out because they can give more money to fewer people and screw the rest.

What they essentially do is just guarantee current income for partners for another 5 years with the benefit of the capital gains rate on the initial lump sum and in return they get longterm ability to drop salaries and screw everyone down the road.

We decided that if their company feels strongly enough in the future profitability of anesthesia than we really shouldn't be selling.

We both know that the senior partners wouldn't sell out for anything less than 2 X yearly income. 3 X yearly income paid out over a short period of time followed by a salary for 4 years is very enticing for group members 50+ in age.

Regardless of their exact offer to you, if you are under the age 40 (definitely under the age of 35) selling your company for a large upfront sum (even $2 million) only to be an employee for the remainder of your career doesn't seem to be nearly as appealing as being a partner at MGMA 90th percentile for the next 2 decades.

 

[Mman]

You are splitting hairs. The partners get 2 million dollars then a salary for 5 years.
Your total income after 5 years is based on CAMELOT LEVEL COLLECTIONS in terms of revenue, payer mix, etc. so "shifting your income forward" to me means big money I may or may not earn down the road. I doubt income in 5 years is as good as it is today based on everything going on in healthcare.


Super Partners have more voting rights and can essentially force these types of deals on other partners.

Mednax has CFO, Accountants, etc and if they want you badly enough the deal can be sweetened a bit. But, you wouldn't know about that because you never countered their offer.

Finally, at my age and situation I would take such a deal in a nanosecond. At your age I don't blame you for holding out and hoping Obamacare along with Obama's re-election goes down in flames.

Doze is correct about these "buyouts" going forward. Employees rarely work as hard or care as much as owners.

MEDNAX is simply ENRON. Give it 5 years.

I'm not splitting hairs. I'm pointing out that they don't have a set "offer" to groups. It's completely variable. Their exact offer is that partners take their expected 5 year salary based on past collections and shift a lump sum of it to capital gains. They don't use camelot level collections projections. They look at your actual billing and collections data for several years going back.

That's why every offer is different. Different groups got and accepted different offers from them. But they tend to only go after very profitable groups and have no interest in poorly performing groups in terms of revenue.

But they aren't stupid. They are betting tens of millions of dollars on the longterm profitability of the specialty. And they have some very smart people crunching their numbers.

We elected to never even show them our books (they know from hospital case data and local payor mix roughly what our income is but don't know all the local details), so despite their desire to see it and make us an offer we chose to not pursue it. The thought of working for the man and losing autonomy is not something any of us signed up for.

I don't think they are a mean or bad company. I think of all the large groups out there it's probably one of the more open and fair ones around, but they want to make you an employee in exchange for your right to future earnings.

 

[BLADEMDA]

I'm not splitting hairs. I'm pointing out that they don't have a set "offer" to groups. It's completely variable. Their exact offer is that partners take their expected 5 year salary based on past collections and shift a lump sum of it to capital gains. They don't use camelot level collections projections. They look at your actual billing and collections data for several years going back.

That's why every offer is different. Different groups got and accepted different offers from them. But they tend to only go after very profitable groups and have no interest in poorly performing groups in terms of revenue.

But they aren't stupid. They are betting tens of millions of dollars on the longterm profitability of the specialty. And they have some very smart people crunching their numbers.

We elected to never even show them our books (they know from hospital case data and local payor mix roughly what our income is but don't know all the local details), so despite their desire to see it and make us an offer we chose to not pursue it. The thought of working for the man and losing autonomy is not something any of us signed up for.

I don't think they are a mean or bad company. I think of all the large groups out there it's probably one of the more open and fair ones around, but they want to make you an employee in exchange for your right to future earnings.

Technically you are correct and I am wrong.

That said, the range for most buyouts is 1.5 million on the low end to 2.5 million on the higher end with the average being a bit over $2 million per partner. Since Mednax only pursues the most profitable groups in the USA the partners are usually all earning 95th percentile MGMA income plus some. Do the math. $2 million each is pretty close.

 

[proman]

Baltimore? Wonder what group that is....
NAPA is at Sinai. They were at St. Agnes but they got kicked out...
The only large group I can think of would be the group at GBMC.... my impression is that GBMC's group is stuggling.. surgeries are down at their hospital and the group is fighting to do outpatient work....

drccw

There's also the group at St Joe's (which is First Colonies with 4 other hospitals) and the Union group (I doubt Medstar is going anywhere). The buyout of St Joe's makes them a target.

 

[drccw]

There's also the group at St Joe's (which is First Colonies with 4 other hospitals) and the Union group (I doubt Medstar is going anywhere). The buyout of St Joe's makes them a target.

I would think that First Colonies would be a less attractive target given that revenues are way way down at St. Joes.. Plus, who knows what U of Md is going to do with St. Joes....

Union is a good group but they have a lot of providers. They have chosen to go with more partners and better lifestyle....

drccw

 

[DrRobert]

Interesting discussion. Sounds like Mednax would have their hands full with our group... 25+ MDs... all equal partners. So at $2 million apiece, they would need to come up with $50+ million lump sum.

 

[BLADEMDA]

Interesting discussion. Sounds like Mednax would have their hands full with our group... 25+ MDs... all equal partners. So at $2 million apiece, they would need to come up with $50+ million lump sum.

The have a PE multiple of 14. For every additional dollar of earnings they generate the street awards them 14 more in stock price. They can borrow the $50 million from the street/investors in order to "grow their company" in a positive way. This $50 million results in more revenue and more earnings in as short as 2-3 years; again, they get a multiple on those extra earnings which your company doesn't.

 

[Mman]

Interesting discussion. Sounds like Mednax would have their hands full with our group... 25+ MDs... all equal partners. So at $2 million apiece, they would need to come up with $50+ million lump sum.

They dislike going after equal groups like that. They prefer to hunt the pyramid schemes where they can pay off a few at the top to get the labors of everybody at the bottom. Equal partners means it is relatively far more expensive for them to acquire a group.

And they can have as high a P/E ratio as they want, but they don't turn a profit on the group until year 6 (if it's a 5 year buyout/contract). It's break even until then. Actually short term loss paying out the buyout and then recuperating that loss on salaries the next 4-5 years. Gross revenue for the company goes up, but their net revenue is at best neutral on the deal for those first 5 years. That's why they really want to go after groups with varying levels of partners.

 

[periopdoc]

Another good reason to avoid pyramidal partnerships with "super partners."

- pod

 

[deleted126335]

They dislike going after equal groups like that. They prefer to hunt the pyramid schemes where they can pay off a few at the top to get the labors of everybody at the bottom. Equal partners means it is relatively far more expensive for them to acquire a group.

And they can have as high a P/E ratio as they want, but they don't turn a profit on the group until year 6 (if it's a 5 year buyout/contract). It's break even until then. Actually short term loss paying out the buyout and then recuperating that loss on salaries the next 4-5 years. Gross revenue for the company goes up, but their net revenue is at best neutral on the deal for those first 5 years. That's why they really want to go after groups with varying levels of partners.

Agree completely.

 

[BLADEMDA]

They dislike going after equal groups like that. They prefer to hunt the pyramid schemes where they can pay off a few at the top to get the labors of everybody at the bottom. Equal partners means it is relatively far more expensive for them to acquire a group.

And they can have as high a P/E ratio as they want, but they don't turn a profit on the group until year 6 (if it's a 5 year buyout/contract). It's break even until then. Actually short term loss paying out the buyout and then recuperating that loss on salaries the next 4-5 years. Gross revenue for the company goes up, but their net revenue is at best neutral on the deal for those first 5 years. That's why they really want to go after groups with varying levels of partners.

In order to keep growing over the next few years Mednax will be buying more groups with all equal partners. I don't agree that Mednax won't eventually pay $50 million upfront to acquire solid groups. However, they prefer a 4:1 CRNA/MD ratio practice. That type of practice is viewed as the most profitable.

 

[DrRobert]

In order to keep growing over the next few years Mednax will be buying more groups with all equal partners. I don't agree that Mednax won't eventually pay $50 million upfront to acquire solid groups. However, they prefer a 4:1 CRNA/MD ratio practice. That type of practice is viewed as the most profitable.

That would be us.

Even at age 35, I would at least consider it... if it truly were a $2 million lump sum.

My bare minimum retirement number is $2 million with a goal of $4 million. I would have 30 years to turn 2 into 4... that's not unreasonable even with a fairly conservative portfolio. And of course I would continue to save aggressively throughout my career.

 

[Regurgitant Jet]

Thanks for the comments, everyone (except the screen name comment, if directed at me...just finished an echo rotation, and the term came to mind...definitely not an attempt to hijack someone else's name).

Anyway, my salary would improve on the front end since no longer on a partnership track, but the salary would be considerably lower than what I had expected to make as a partner. I'm hearing the same things from my future partners that I have read about other groups that have sold their practices. They basically think that the sky is falling financially because of the impact of health reform, bundled payments, ACOs, etc., and they think that they need the strength of numbers in a company like this to continue to survive. I can see how this would be an attractive option for partners in some groups, particularly if they are older, but even if reimbursements fall dramatically, I think I would still be better off at this point in the beginning of my career by finding a practice where I have the prospect of becoming a partner. The employment deal basically commits me to the worst case financial scenario even if cuts aren't as bad as some people think. If I find another partnership track, then I still have a chance for higher earning potential depending on what happens, I still have the hope of becoming a part owner of the group in a few years and having a voice in how the group is run, and if my future group ultimately decided employment is the best option, then perhaps I can be part of the buyout if I make partner before then instead of being on the losing end of the deal in my current practice.

 

[deleted126335]

Thanks for the comments, everyone (except the screen name comment, if directed at me...just finished an echo rotation, and the term came to mind...definitely not an attempt to hijack someone else's name).

Anyway, my salary would improve on the front end since no longer on a partnership track, but the salary would be considerably lower than what I had expected to make as a partner. I'm hearing the same things from my future partners that I have read about other groups that have sold their practices. They basically think that the sky is falling financially because of the impact of health reform, bundled payments, ACOs, etc., and they think that they need the strength of numbers in a company like this to continue to survive. I can see how this would be an attractive option for partners in some groups, particularly if they are older, but even if reimbursements fall dramatically, I think I would still be better off at this point in the beginning of my career by finding a practice where I have the prospect of becoming a partner. The employment deal basically commits me to the worst case financial scenario even if cuts aren't as bad as some people think. If I find another partnership track, then I still have a chance for higher earning potential depending on what happens, I still have the hope of becoming a part owner of the group in a few years and having a voice in how the group is run, and if my future group ultimately decided employment is the best option, then perhaps I can be part of the buyout if I make partner before then instead of being on the losing end of the deal in my current practice.

Agree with your analysis. Employment is a trend that is going nowhere but up. Two points to consider when interviewing: If you select a partnership track position, be aware that the group may decide to sell the group before you make partner. They might even be on the verge of selling while you interview and not able to tell you when you interview due to confidentiality clauses. Even if you ask the question directly. Make sure that all partners are equal. No "super partners", "founding partners", "preferred shareholders", etc. I cannot overemphasize this last point.

Good luck

 

[jetproppilot]

Thanks for the comments, everyone (except the screen name comment, if directed at me...just finished an echo rotation, and the term came to mind...definitely not an attempt to hijack someone else's name).

Anyway, my salary would improve on the front end since no longer on a partnership track, but the salary would be considerably lower than what I had expected to make as a partner. I'm hearing the same things from my future partners that I have read about other groups that have sold their practices. They basically think that the sky is falling financially because of the impact of health reform, bundled payments, ACOs, etc., and they think that they need the strength of numbers in a company like this to continue to survive. I can see how this would be an attractive option for partners in some groups, particularly if they are older, but even if reimbursements fall dramatically, I think I would still be better off at this point in the beginning of my career by finding a practice where I have the prospect of becoming a partner. The employment deal basically commits me to the worst case financial scenario even if cuts aren't as bad as some people think. If I find another partnership track, then I still have a chance for higher earning potential depending on what happens, I still have the hope of becoming a part owner of the group in a few years and having a voice in how the group is run, and if my future group ultimately decided employment is the best option, then perhaps I can be part of the buyout if I make partner before then instead of being on the losing end of the deal in my current practice.

I made a misjudgment.

I'm very sorry.

 

[jetproppilot]

Settle down, Beavis.

Do you really assume his screen name is an attack on you and not the physiological occurence observed on TEE in our practice?

Someone comes in asking a question about his situation with his career and impending AMC takeover and you call him an idiot. Not to mention using "ma'am" as an insult. Very telling.

Thanks for contributing!

Accurate description man.
Sorry for my misstep.

 

[Regurgitant Jet]

Agree with your analysis. Employment is a trend that is going nowhere but up. Two points to consider when interviewing: If you select a partnership track position, be aware that the group may decide to sell the group before you make partner. They might even be on the verge of selling while you interview and not able to tell you when you interview due to confidentiality clauses. Even if you ask the question directly. Make sure that all partners are equal. No "super partners", "founding partners", "preferred shareholders", etc. I cannot overemphasize this last point.

Good luck

Good advice. Thanks!

 

[Regurgitant Jet]

I made a misjudgment.

I'm very sorry.

No worries, man.

 

[voodoomagic]

No worries, man.

Employment model only goes up when Doctors, i.e., you, me, continue to have short-term goals, and over-extended lifestyles.
This is the path to AMCs' conquests.

DO not undersell yourself to yourself, or to your "employers". If by doing a Fellowship, you bring more to the table, then demand more. Simple.

Choose to be an independent contractor and hire your services out to the hospital. Do your own cases. Wait until the situation reveals itself a bit more.

Bottom line: There's no easy money, life's a bitch. If you ALLOW yourself to be screwed over, then you sort of deserve it. Always remember that Anesthesiologists... are the most greedy breed I have come across. They hire CRNAs and whine that nobody respects us, and that they're replacing us etc etc. Just....... don't ever trust an Anesthesiologist... or most other Doctors especially Private Practice ones... speaking from experience. You're always going to be your only backup. Stick to your principles. Seriously. Stick to your principles. Don't compromise and it'll all be okay, for you at least.

 

[voodoomagic]

Good advice. Thanks!

Negative. Most groups, should not, and probably will not sell because this equation just doesn't make sense.. even with basic math, you're walking away with $200-$300K tops in exchange for your autonomy etc. So, do hold out for the right group/right job... knowing full well that money... changes peoples' integrity.

 

[Mman]

Choose to be an independent contractor and hire your services out to the hospital. Do your own cases.

And how exactly does someone do that? I've never set foot in a hospital where that was even possible. Hospitals have contracts for anesthesia services. Neither side can violate the contract without paying the penalty. So a hospital with a contract with a private group or AMC can't hire you as an independent contractor even if they wanted to. I mean you could offer to work for $5/hr with no benefits and they still can't hire you.

 

[voodoomagic]

And how exactly does someone do that? I've never set foot in a hospital where that was even possible. Hospitals have contracts for anesthesia services. Neither side can violate the contract without paying the penalty. So a hospital with a contract with a private group or AMC can't hire you as an independent contractor even if they wanted to. I mean you could offer to work for $5/hr with no benefits and they still can't hire you.

Not all hospitals sign Contracts of Exclusivity. Even with my Private Practice Group, neither side wanted to sign an Exclusive Contract. I know of AMC run places where there is no Exclusivity Clauses in place. Hospital Administrators are dumb and greedy, but their greed ensures they are not that dumb. Needless to say, you would not make as much as working for the AMC, but you can extrapolate-- form an all-MD group, "outperform" the 4:1 model, thereby SHOWING what we do bring to the table, then justifying the "subsidy" (it's such a cuss word when in fact it is fee for service and expertise provided) you may or may not ask for. Would take time to build up such a reputation, and of course, who even knows if "quality" would matter?! But to answer your question, I do believe it's possible- and it'll definitely be an uneasy work environment-- always is when two groups are in the midst... but you didn't NOT apply to Medical School because it was difficult right?

 

[Mman]

Not all hospitals sign Contracts of Exclusivity. Even with my Private Practice Group, neither side wanted to sign an Exclusive Contract. I know of AMC run places where there is no Exclusivity Clauses in place. Hospital Administrators are dumb and greedy, but their greed ensures they are not that dumb. Needless to say, you would not make as much as working for the AMC, but you can extrapolate-- form an all-MD group, "outperform" the 4:1 model, thereby SHOWING what we do bring to the table, then justifying the "subsidy" (it's such a cuss word when in fact it is fee for service and expertise provided) you may or may not ask for. Would take time to build up such a reputation, and of course, who even knows if "quality" would matter?! But to answer your question, I do believe it's possible- and it'll definitely be an uneasy work environment-- always is when two groups are in the midst... but you didn't NOT apply to Medical School because it was difficult right?

I've never set foot in a hospital that had multiple anesthesia groups/departments/amcs/whatever. The work environment would be almost impossible to manage. I mean how do cases get assigned? Relief? Call? Managing patients postop, epidurals, etc. Too confusing to even think about. And why would your group not want an exclusive contract with the hospital? To not have it is the dumbest thing I've ever heard of. Nobody wants competition brought in to bump them out.

 

[aneftp]

I think you guys are missing another big point why groups sell out: They get tired of hospital re negotiations every 2-3 years. Even groups which do not take any subsidy (usually these groups are immune from AMCs cause AMCs have very little to offer to the hospital in terms of cost savings). But hospitals keep demanding more and more "freebies".

One's friends group in Maryland. The OBs get a flat $800/patient for indigent C/S. But they asked my friend anesthesia group to take $100 flat fee per patient. This is an extremely busy OB hospital in the region that does 8K plus deliveries each year.

Another hospital asks to have a free MD at the board/handling emergencies till 5PM; At first hospital decides to split cost with the group. Then hospital decides not to split the cost and have the group eat the cost. Than hospital now demands free MD to at least 8PM. Than the demands are that they want certain MDs working with certain "core" OR staffing so they work primarily with certain surgeons. Hospital CEO got some ridiculous idea that there should be certain teams that work together all the time but they forget anesthesiologists are required to take call and perform all types of cases. So if on call MD isn't doing a lot of thoracic cases and than ends up with case in middle of the night, it's a disservice to the patient if MD is rusty cause he's not of the "core" team.

I've never set foot in a hospital that had multiple anesthesia groups/departments/amcs/whatever. The work environment would be almost impossible to manage. I mean how do cases get assigned? Relief? Call? Managing patients postop, epidurals, etc. Too confusing to even think about. And why would your group not want an exclusive contract with the hospital? To not have it is the dumbest thing I've ever heard of. Nobody wants competition brought in to bump them out.

There are hospitals like that. I know a few in the mid Atlantic and down in Florida that are split.

Sometimes just cardiac/general split.

Sometimes general/general split wjth certain surgeons going with certain MDss.

 

[voodoomagic]

I think you guys are missing another big point why groups sell out: They get tired of hospital re negotiations every 2-3 years. Even groups which do not take any subsidy (usually these groups are immune from AMCs cause AMCs have very little to offer to the hospital in terms of cost savings). But hospitals keep demanding more and more "freebies".

One's friends group in Maryland. The OBs get a flat $800/patient for indigent C/S. But they asked my friend anesthesia group to take $100 flat fee per patient. This is an extremely busy OB hospital in the region that does 8K plus deliveries each year.

Another hospital asks to have a free MD at the board/handling emergencies till 5PM; At first hospital decides to split cost with the group. Then hospital decides not to split the cost and have the group eat the cost. Than hospital now demands free MD to at least 8PM. Than the demands are that they want certain MDs working with certain "core" OR staffing so they work primarily with certain surgeons. Hospital CEO got some ridiculous idea that there should be certain teams that work together all the time but they forget anesthesiologists are required to take call and perform all types of cases. So if on call MD isn't doing a lot of thoracic cases and than ends up with case in middle of the night, it's a disservice to the patient if MD is rusty cause he's not of the "core" team.


There are hospitals like that. I know a few in the mid Atlantic and down in Florida that are split.

Sometimes just cardiac/general split.

Sometimes general/general split wjth certain surgeons going with certain MDss.

That's a very valid point.... of the continuos negotiations that lead to a bogged down group with no sense of stability. That said... what? Trade your autonomy and quite possibly stability so you can have an AMC do the negotiations? In my opinion, I don't think that's sound reasoning. The AMC is in the business to be in the business and the business is pleasing "customers" (hospitals). Surely they will negotiate but it's coming at a premium, they're taking a management fee AND control of the group's makeup, and future. May not be a bad thing but doesn't sound like a good thing.

As for two groups in one hospital.. I've seen it. It's usually ugly, but then again, there's ugliness everywhere and it'll probably get uglier.

 

[CrazyJake]

Good tread. Any updates with some of the big AMC players (Mednax, Sheridan, Napa)?

Hard to find groups left in all doctor model. If your already supervising CRNA rooms what can an AMC really bring to the table? Hospital administrators just don't get it.

 

[Mman]

If your already supervising CRNA rooms what can an AMC really bring to the table? Hospital administrators just don't get it.

1) It's usually the group that sells out to the AMC, not the hospital seeking out an AMC.

2) If a hospital pays out a large subsidy to a group, the AMC can do it for less or nothing so it saves the hospital money.


That's basically it. Large AMCs have higher reimbursement rates from insurance companies so they get paid more money for the same amount of physician work.


The potentially very interesting thing to me is how bundled payments are going to factor in to this. Hospitals might be less happy to be dealing with an AMC than with a small group when it comes to arguing over who gets what percentage of it. Along those lines, AMCs probably aren't going to like having the hospital get the money and then divvy it up rather than them getting to bill the 3rd party payer directly.