multispecialty group

[pogo]

First off I would like to thank everyone for their responses to my other thread. Now I have another question. I want to know if their are any major differences in being a partner in a multi vs single specialty group. Also, i was told by this group that they distribute all there profit equally which I find hard to believe. I have always thought that it was pretty much an "eat what you kill" type arrangment with groups. This group has approx 90 docs in the group, 5 of which are surgeons, and they are offering a very good starting salary with full partnership in 3 years and NO BUY IN!!!!! The recruiter, which is not a head hunter mind you, says that I would be making well above that starting salary once I became a partner. Do groups generally operate this way?

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[Pilot Doc]

First off I would like to thank everyone for their responses to my other thread. Now I have another question. I want to know if their are any major differences in being a partner in a multi vs single specialty group. Also, i was told by this group that they distribute all there profit equally which I find hard to believe. I have always thought that it was pretty much an "eat what you kill" type arrangment with groups. This group has approx 90 docs in the group, 5 of which are surgeons, and they are offering a very good starting salary with full partnership in 3 years and NO BUY IN!!!!! The recruiter, which is not a head hunter mind you, says that I would be making well above that starting salary once I became a partner. Do groups generally operate this way?

If you're in a MSG that distributes profits evenly, that's a bad deal as a surgeon who will be generating a lot more profit than the (presumably) majority of PCP's in the group. There's got to be more to this story - there's no way a MSG that large simply splits the pot among all docs be they interventional cardiologist or pediatricians.

That said, MSG's are generally a bad deal for surgeons or other high income proceduralists b/c a well run GS group can have an overhead below 20% whereas most MSG's run in the 40-50% range. You are, to some extent, going to be the cash cow that subsidizes the internists. A possible exception might be a situation where a big MSG has some competitor and is willing to subsidize you to beat the competition.

Try doing a search for posts by FliteSurgn. He is/was a GS in a busy group in the midwest. His posts are the best I've seen about the financial nitty-gritty of running a GS practice. (And, to my knowledge, he's the only pvt practice GS attending who has ever really posted here.)

 

[maxheadroom]

Pilot Doc is right. Multispecialty groups love to recruit surgeons and cardiologists because they suck them dry. You'll be funding the retirement accounts of FPs and Pediatricians. Bad idea jeans.

 

[elwademd]

depends on the politics of the location as well. does that msg have more political weight/firepower than the ssg? does the msg have an easy time getting referrals? does the ssg have an easy or hard time getting referrals?

is the msg the preferred provider for the large health plans in the area? what about the ssg?

yes the overhead for an msg is typically way above that of an ssg... but if you can't get referrals on a consistent basis, you're not the preferred provider, and don't have much clout to keep things the way they are or make a change... and you just have to be in that particular location, then the ssg may not work out for you.

so, just make sure to ask more than just salary and partnership!

 

[copacetic]

if you're in a specialty on the higher earning end of the curve, you're better off in smaller MSGs where your earning potential could give you more clout, or better yet, forget MSGs all together and join a single specialty group. take home pay is greater across the board in single specialty groups since you're not subsidizing anyone's income. also, theres the benefit that you can share and trade ideas with your colleagues who in most cases are in the same specialty as you and just down the hall.

 

[pogo]

So I talked with a surgeon today who is in a group of two and looking for a thirdz. He stated that they recently withdrew from a number of their insurance contracts. They only take patients who insurances allow them to see providers outside of the network. He said that their numbers have dropped but their income is unchanged. He explained that you get paid significantly more at an "out of network" price vs the usual negotiated price. I had never heard of this so it was totally new to me. Is this a common thing now and if not why not. I am considering becoming a partner in the group but an slightly afraid that the bottom will fall out of this little scheme they have. Any thoughts anyone?

 

[Leforte]

Going only out-of-network sounds like a great way to also screw your patients. Instead of paying a 10% deductible, they're stuck with the 20-50% fee for seeing an out of network provider. So they're insured, but forced to see the only doc in town who, unfortunately, is out of network. The doc then can bill higher and the patient then has to pay a higher percentage of a higher fee. Most insurance plans won't pay for an out-of-network provider if there is one in-network that can provide the services. I am sure the insurance due portion is similar, with the difference paid by the patient. For example

Adenotonsillectomy - Surgeon collection in network $350
Patient 10% = $35
Insurance 90% = $315

Adenotonsillectomy - Surgeon collection out of network $500
Patient 40% = $200
Insurance 60% = $300

Doc wins, insurance company wins, patient loses.

I think the bottom would fall out once a surgeon comes into town who does take the insurance rates. The insurance companies would direct patients towards that surgeon and not pay at all for the out of network providers if the same procedure can be done in network.

 

[maxheadroom]

Working out of network is pretty common in Plastics. Most recon work doesn't pay very well, so one way that surgeons get around that is to have very few insurance contracts and get out of network fees for everybody else. It isn't a scam. Patients have the option to go see another physician if they don't like your fee schedule.

I know an Orthopod who does exclusive hand trauma. He isn't on any insurance plans. When a patient comes into the ER, he gets paid out of network rates for every patient that he sees. He has to argue with the companies sometimes, but his cash flow is good enough that he can afford to wait a little while to get paid.

 

[Pilot Doc]

Is this a common thing now and if not why not? I am considering becoming a partner in the group but an slightly afraid that the bottom will fall out of this little scheme they have. Any thoughts anyone?

It is a common practice in areas where demand>supply. If you're the only game in town, you don't have to take the insurance company deal of lower prices in exchange for volume. If you're in a big market with many different groups and/or people actively seeking to move into the area, it'll be much harder. But even so, I've heard of people making it work. The Bulletin of the ACS had an article several months back about a group in NJ or Long Island that went out of network and saw their income increase for doing fewer cases.

All that said: you sound fairly uncertain about how the financial side of all this works. You might be best served to find a job that you can stay in for 2-3 years and leave easily (e.g. paid tail, no non-compete, no loans, etc)

 

[Pilot Doc]

Going only out-of-network sounds like a great way to also screw your patients. ....
Doc wins, insurance company wins, patient loses.

Medicine is a business. The alternative is being on the receiving end of the screwing. If making a living bothers you, go work for the health department.

I think the bottom would fall out once a surgeon comes into town who does take the insurance rates. The insurance companies would direct patients towards that surgeon and not pay at all for the out of network providers if the same procedure can be done in network.

This assumes that
1) a surgeon would want to come to town
2) they would decide to compete on price and
3) you are unable to build a reputation as someone whose work is good enough to chip in $150 for your surgery.