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reporter working on private equity story

thewrap

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Hi all, I'm a journalist in Los Angeles. I'm reporting a story for the New York Times Magazine about private equity acquisitions of practice groups. I'm looking for doctors with experience working for PE-owned medical practices—young anesthesiologists in particular. Your name doesn't necessarily have to appear in print.

Please email if you'd like to talk. I want to hear from you.

[email protected]
www.jessebarron.com

(Identifying myself and my outlet per SDN policy: Journalist / News Media Inquiries)
 
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pgg

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Isn't proton mail a encrypted mail service that doesn't require any identifiers? this smells fishy - OP could literally be anyone.
It's a reputable mail service that offers superb security. The sort of service that I might want to use, if I was a journalist who wanted sources to be able to contact me securely and privately. It wouldn't dissuade me from talking to him.
 
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Urzuz

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Hi all, I'm a journalist in Los Angeles. I'm reporting a story for the New York Times Magazine about private equity acquisitions of practice groups. I'm looking for doctors with experience working for PE-owned medical practices—young anesthesiologists in particular. Your name doesn't necessarily have to appear in print.

Please email if you'd like to talk. I want to hear from you.

[email protected]
www.jessebarron.com

(Identifying myself and my outlet per SDN policy: Journalist / News Media Inquiries)

Can you next write about or tie into this piece how nurses are being cut loose to practice independently in hospitals in place of physicians, all behind the public’s back, and all due to lobbying efforts and political agendas? There is no regard for patient safety in this equation, and all politicians and hospital administrators are looking at is their bottom line. I will be the first to admit that this topic needs to be written tastefully since the slightest negativity towards nurses, especially during this pandemic, can probably sink your career and cause the rabid nursing unions to unleash the hounds on you, but this is a topic that the mainstream media is failing the public by not reporting on and talking about on a national level. Thanks.
 
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thewrap

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Do you, will you include AMCs? What’s your angle? You need to find people who made partners, then be bought out to really have a comparison. Or need the perspective of older guys who sold to see what’s up.

100% agree. I've spoken to multiple older doctors who were partners at the time of a PE acquisition. Posting here precisely because I'm hoping to find younger doctors to interview. Younger doctors may not to share in the financial benefits of these transactions. I think AMCs might fall slightly outside my scope, which is the consolidation of practice groups and its impact, but maybe I'm missing something?
 

thewrap

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Can you next write about or tie into this piece how nurses are being cut loose to practice independently in hospitals in place of physicians, all behind the public’s back, and all due to lobbying efforts and political agendas? There is no regard for patient safety in this equation, and all politicians and hospital administrators are looking at is their bottom line. I will be the first to admit that this topic needs to be written tastefully since the slightest negativity towards nurses, especially during this pandemic, can probably sink your career and cause the rabid nursing unions to unleash the hounds on you, but this is a topic that the mainstream media is failing the public by not reporting on and talking about on a national level. Thanks.
Thanks so much for this. Would you email me to continue the conversation?

One thing I've read in SDN forums is that PE anesthesiology roll-ups may have a high ratio of CRNAs to MDs. If anyone on here can speak to that, I'd be especially interested in talking to you.

[email protected]
www.jessebarron.com
 

thewrap

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Isn't proton mail a encrypted mail service that doesn't require any identifiers? this smells fishy - OP could literally be anyone.
Hi! Lots of journalists use ProtonMail. The encryption keeps sources safe, etc. Here's some more info, if you're curious:

 
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IMGASMD

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100% agree. I've spoken to multiple older doctors who were partners at the time of a PE acquisition. Posting here precisely because I'm hoping to find younger doctors to interview. Younger doctors may not to share in the financial benefits of these transactions. I think AMCs might fall slightly outside my scope, which is the consolidation of practice groups and its impact, but maybe I'm missing something?

I am not sure if your pool of sources would be big enough, if you’re only interested in PE acquired practices. I personally don’t know any, but that doesn’t mean there aren’t many.

There are many more people here or out there, whose practices are bought out by AMCs. Most large AMCs now all have some PE investors.

Just saying/asking if you are looking into a very specific subset of people or more general (AMCs employees) physicians.

Wanna share your hypothesis?
 

Mman

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I am not sure if your pool of sources would be big enough, if you’re only interested in PE acquired practices. I personally don’t know any, but that doesn’t mean there aren’t many.

There are many more people here or out there, whose practices are bought out by AMCs. Most large AMCs now all have some PE investors.

Just saying/asking if you are looking into a very specific subset of people or more general (AMCs employees) physicians.

Wanna share your hypothesis?

I think private equity is mostly investing through partnerships with AMC. I do not think they are just flat out buying individual anesthesia practices.
 
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IMGASMD

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I think private equity is mostly investing through partnerships with AMC. I do not think they are just flat out buying individual anesthesia practices.

Part of the reason why I asked that question in the beginning was trying to figure out how much OP understand the landscape, or to see if I am missing something. Since I don’t know any PE directly acquisitions.
 

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Part of the reason why I asked that question in the beginning was trying to figure out how much OP understand the landscape, or to see if I am missing something. Since I don’t know any PE directly acquisitions.
I think private equity is mostly investing through partnerships with AMC. I do not think they are just flat out buying individual anesthesia practices.
Got you. Maybe I'm using inaccurate terminology without realizing it. PE firms do make offers on independent anesthesia practice groups. Which part of this do I seem to be misunderstanding? Importance of AMC? (Thanks for your help btw.)
 
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Got you. Maybe I'm using inaccurate terminology without realizing it. PE firms do make offers on independent anesthesia practice groups. Which part of this do I seem to be misunderstanding? Importance of AMC? (Thanks for your help btw.)




Generally, PE does not make direct offers to anesthesia groups. They partner with and provide capital to AMCs who then go out and find candidate practices. The AMCs then make the offer. For example, Welsh Carson would not go out and directly purchase Anesthesia Consultants of Big City. Their subsidiary AMC, USAP, which runs the day to day anesthesia operations would make the offer with capital provided by Welsh Carson.
 
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kidthor

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Generally, PE does not make direct offers to anesthesia groups. They partner with and provide capital to AMCs who then go out and find candidate practices. The AMCs then make the offer. For example, Welsh Carson would not go out and directly purchase Anesthesia Consultants of Big City. Their subsidiary AMC, USAP, which runs the day to day anesthesia operations would make the offer with capital provided by Welsh Carson.

Sure, and then they put a bunch of finance douchbags on the AMC's board of directors along with one token physician. So PE controls the whole operation ultimately. They don't put capital in and allow free wheeling by the AMC, the command the AMC on how they'll operate and acquire. The AMC is a mirage to block what's above.
 
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vector2

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Got you. Maybe I'm using inaccurate terminology without realizing it. PE firms do make offers on independent anesthesia practice groups. Which part of this do I seem to be misunderstanding? Importance of AMC? (Thanks for your help btw.)

PE firms directly acquiring groups may be more prevalent for very large anesthesia or emergency medicine physician groups, but nimbus is correct- typically AMCs do the acquisitions and are backed by private equity or other financial institutions.

For instance, in addition to USAP, research the history of Sheridan-EmCare which became Envision which was acquired by KKR.

Or TeamHealth of which JANA partners had a big stake and they were eventually acquired by Blackstone


Or take a look at MEDNAX (NYSE: MD) and some of their institutional ownership

1590879730197.png
 
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thewrap

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PE firms directly acquiring groups may be more prevalent for very large anesthesia or emergency medicine physician groups, but nimbus is correct- typically AMCs do the acquisitions and are backed by private equity or other financial institutions.

For instance, in addition to USAP, research the history of Sheridan-EmCare which became Envision which was acquired by KKR.

Or TeamHealth of which JANA partners had a big stake and they were eventually acquired by Blackstone


Or take a look at MEDNAX (NYSE: MD) and some of their institutional ownership

View attachment 308423
Now I understand the distinction you're making. Yes, of course—already on the same page. I've written about PE in the past, so I know the way they structure acquisitions. (e.g. How America’s Oldest Gun Maker Went Bankrupt: A Financial Engineering Mystery)

I wonder if you personally know anyone who worked for a group that was acquired—via whatever indirect structure—in a PE-backed deal? Thanks again for talking this through.

[email protected]
 
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Mman

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PE firms directly acquiring groups may be more prevalent for very large anesthesia or emergency medicine physician groups, but nimbus is correct- typically AMCs do the acquisitions and are backed by private equity or other financial institutions.

For instance, in addition to USAP, research the history of Sheridan-EmCare which became Envision which was acquired by KKR.

Or TeamHealth of which JANA partners had a big stake and they were eventually acquired by Blackstone


Or take a look at MEDNAX (NYSE: MD) and some of their institutional ownership

View attachment 308423

Mednax's "ownership" is because they are a large publicly traded company, not because private equity (which is by definition to publicly traded) is controlling their interests.
 
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Mman

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Sure, and then they put a bunch of finance douchbags on the AMC's board of directors along with one token physician. So PE controls the whole operation ultimately. They don't put capital in and allow free wheeling by the AMC, the command the AMC on how they'll operate and acquire. The AMC is a mirage to block what's above.

the whole point of private equity in any deal is to take a financial controlling stake in a company and make it more profitable and then almost always flip it to another buyer down the line. That is how their industry makes money. AMCs need money to finance buyouts of practices and so they started turning to private equity to provide them that cash.
 
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vector2

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Mednax's "ownership" is because they are a large publicly traded company, not because private equity (which is by definition to publicly traded) is controlling their interests.

Yeah, no sht. Hence why my post contained their NYSE ticker and in the Morningstar ownership image I posted "Institutions" is highlighted as opposed to "Funds." The fact that Blackrock or Vanguard have 10% stakes because of their passive ETFs or mutual funds isn't what worries me. Large (but not necessarily controlling) ownership stakes by PE firms (notice some of those LPs and LLCs such as Starboard who has an almost 10% stake?) many times entitles those firms to board seat(s) or other soft influence and thus the ability to dictate some (almost undoubtedly anti-physician, anti-patient) policy, even within publicly traded companies.


e: Not to mention, large ownership of publicly traded corps by PE sometimes foretells acquisition. Starboard took a large stake in Envision before KKR acquired
 
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aneftp

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100% agree. I've spoken to multiple older doctors who were partners at the time of a PE acquisition. Posting here precisely because I'm hoping to find younger doctors to interview. Younger doctors may not to share in the financial benefits of these transactions. I think AMCs might fall slightly outside my scope, which is the consolidation of practice groups and its impact, but maybe I'm missing something?
There is really no difference between a AMC buying anesthesia radiology er practice vs a big cough cough “non profit” hospital system buying up physician practices involving cardiology , primary care , pediatrics. Thus controlling the patient population admissions into their hospital systems.
Got you. Maybe I'm using inaccurate terminology without realizing it. PE firms do make offers on independent anesthesia practice groups. Which part of this do I seem to be misunderstanding? Importance of AMC? (Thanks for your help btw.)
the largest growth in buying up anesthesia practices was 2010-2015. Along with other speciality care practices. But anesthesia in particular so many practices sold out.

the article you should be writing on is to talk to original usap partners. Houston Dallas Orlando practices. The original practices.

Ask about their frustrations about PE promising them ipo by end of 2017 with even more money. Sure they all got lump sum payments plus stock. But it’s the stock PE is suppose to flip for even more than has been a no go with no market for PE acquisition. Ask the former original owners how long they can continue selling new grads on the fake partnership to further their Ponzi schemes. Without new grads/new blood “buying in”. They are screwed.

bottom line. No one wants to buy any of the PE squirted portfolio of anesthesia company. Unless it’s a complete fire sale dump of mednax American Anesthesiology practices recently.
 
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Mman

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Yeah, no sht. Hence why my post contained their NYSE ticker and in the Morningstar ownership image I posted "Institutions" is highlighted as opposed to "Funds." The fact that Blackrock or Vanguard have 10% stakes because of their passive ETFs or mutual funds isn't what worries me. Large (but not necessarily controlling) ownership stakes by PE firms (notice some of those LPs and LLCs such as Starboard who has an almost 10% stake?) many times entitles those firms to board seat(s) or other soft influence and thus the ability to dictate some (almost undoubtedly anti-physician, anti-patient) policy, even within publicly traded companies.


e: Not to mention, large ownership of publicly traded corps by PE sometimes foretells acquisition. Starboard took a large stake in Envision before KKR acquired

as far as I can tell none of those firms have anybody on the board of Mednax and anesthesia was always a small part of Mednax. In fact, Starboard LP's own website states they focus on investing in publicly traded US companies.

PE backed AMCs are an issue in the anesthesia world. Mednax was never one of those.
 
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There is really no difference between a AMC buying anesthesia radiology er practice vs a big cough cough “non profit” hospital system buying up physician practices involving cardiology , primary care , pediatrics. Thus controlling the patient population admissions into their hospital systems.

the largest growth in buying up anesthesia practices was 2010-2015. Along with other speciality care practices. But anesthesia in particular so many practices sold out.

the article you should be writing on is to talk to original usap partners. Houston Dallas Orlando practices. The original practices.

Ask about their frustrations about PE promising them ipo by end of 2017 with even more money. Sure they all got lump sum payments plus stock. But it’s the stock PE is suppose to flip for even more than has been a no go with no market for PE acquisition. Ask the former original owners how long they can continue selling new grads on the fake partnership to further their Ponzi schemes. Without new grads/new blood “buying in”. They are screwed.

bottom line. No one wants to buy any of the PE squirted portfolio of anesthesia company. Unless it’s a complete fire sale dump of mednax American Anesthesiology practices recently.
aneftp, would you talk to me offline? [email protected]
 

vector2

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as far as I can tell none of those firms have anybody on the board of Mednax and anesthesia was always a small part of Mednax. In fact, Starboard LP's own website states they focus on investing in publicly traded US companies.

PE backed AMCs are an issue in the anesthesia world. Mednax was never one of those.

Envision was also publicly traded at one point, with significant ownership stake by Starboard (who are activist investors), and that was a key step to getting acquired and taken private by KKR so the Starboard sharks could get a nice return. What changes do you think Starboard wanted done to the medical side of the business to make them a more attractive acquisition target, higher doctor salaries?? Mednax is a diversified company and still has a bunch of anesthesia practices all over the place, so your opinion of what percentage of their business is anesthesia is neither here nor there.

Your desire to nitpick and fixate on Mednax/other AMCs public vs private status' is making you miss the forest from the trees, namely that when private equity gets involved with these companies in any significant way then priorities within the business are going to change for the worse.
 
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Mman

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Envision was also publicly traded at one point, with significant ownership stake by Starboard (who are activist investors), and that was a key step to getting acquired and taken private by KKR. Mednax still has a bunch of anesthesia practices all over the place, so your opinion of what percentage of their business is anesthesia is neither here nor there.

Your desire to nitpick and fixate on Mednax/other AMCs public vs private status' is making you miss the forest from the trees, namely that when private equity gets involved with these companies in any significant way then priorities within the business are going to change for the worse.

Mednax has 0 anesthesia practices correct? Weren't they all just sold to NAPA?

I have never said a single good word about private equity helping acquire anesthesia practices. I'm just making the differentiation between PE and a public corporation.
 

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Your desire to nitpick and fixate on Mednax/other AMCs public vs private status' is making you miss the forest from the trees, namely that when private equity gets involved with these companies in any significant way then priorities within the business are going to change for the worse.
The priority is always profit. Don’t matter who owns it. I think the PE world is quickly learning that it is a big hassle to run anesthesia practices and they are not that profitable. The days of the huge buyouts are over.
 
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Mednax has 0 anesthesia practices correct? Weren't they all just sold to NAPA?

I have never said a single good word about private equity helping acquire anesthesia practices. I'm just making the differentiation between PE and a public corporation.

I didn't think the deal had closed yet but you are correct, apparently it did in May.

"North American Partners in Anesthesia is acquiring the division and will swell to more than 6,000 clinicians following the transaction’s close.

American Anesthesiology has been plagued by several recent business challenges, despite tallying $1.2 billion in revenue last year, Mednax noted in a Wednesday filing with the Securities and Exchange Commission. Those include labor cost inflation, adverse changes to its payer mix that have constrained revenue growth, and a “difficult reimbursement environment,” where revenues have failed to keep up with rising costs."


There was no differentiation that needed to be made. I'm pretty sure everyone here knows that when I wrote "NYSE: MD" that that signifies it's a publicly traded company. I think most everyone here also knows that TeamHealth, Envision, AmSurg etc were all once publicly traded. Additionally, I thought it was obvious that physicians were/are worse for wear because of the influence of private equity on both publicly traded and private management companies (they both love getting capital from these vultures), but apparently not...

Take a look at Starboard's mission

"Starboard seeks to invest in deeply undervalued companies and actively engage with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders."

Does this sound like a PE firm that wanted Mednax to pay their physicians more or less before MD unloaded to NAPA?



E: is some of the confusion coming from the fact that the strict definition of PE is that they invest only in private firms? Because the vast majority of the big boys today (KKR, Carlyle, Blackstone, Apollo) plus many of th medium PE/activist investors such as greenlight, bain, starboard, Icahn etc have both public and private corps in their portfolio, so I dont see the particular distinction of private equity as very useful when talking about how these corporate raiders affect anesthesia/ amcs
 
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Mman

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I didn't think the deal had closed yet but you are correct, apparently it did in May.

"North American Partners in Anesthesia is acquiring the division and will swell to more than 6,000 clinicians following the transaction’s close.

American Anesthesiology has been plagued by several recent business challenges, despite tallying $1.2 billion in revenue last year, Mednax noted in a Wednesday filing with the Securities and Exchange Commission. Those include labor cost inflation, adverse changes to its payer mix that have constrained revenue growth, and a “difficult reimbursement environment,” where revenues have failed to keep up with rising costs."


There was no differentiation that needed to be made. I'm pretty sure everyone here knows that when I wrote "NYSE: MD" that that signifies it's a publicly traded company. I think most everyone here also knows that TeamHealth, Envision, AmSurg etc were all once publicly traded. Additionally, I thought it was obvious that physicians were/are worse for wear because of the influence of private equity on both publicly traded and private management companies (they both love getting capital from these vultures), but apparently not...

Take a look at Starboard's mission

"Starboard seeks to invest in deeply undervalued companies and actively engage with management teams and boards of directors to identify and execute on opportunities to unlock value for the benefit of all shareholders."

Does this sound like a PE firm that wanted Mednax to pay their physicians more or less before MD unloaded to NAPA?



E: is some of the confusion coming from the fact that the strict definition of PE is that they invest only in private firms? Because the vast majority of the big boys today (KKR, Carlyle, Blackstone, Apollo) plus many of th medium PE/activist investors such as greenlight, bain, starboard, Icahn etc have both public and private corps in their portfolio, so I dont see the particular distinction of private equity as very useful when talking about how these corporate raiders affect anesthesia/ amcs


The difference between private equity and publicly traded corporations is that PE is always looking to make a short term flip. They have no interest in holding anything long term. Large public corporations can exist for decades without trying to spin off subsidiaries as long as they are well run and profitable.
 

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The difference between private equity and publicly traded corporations is that PE is always looking to make a short term flip. They have no interest in holding anything long term. Large public corporations can exist for decades without trying to spin off subsidiaries as long as they are well run and profitable.

I think you are the one who is confusing things. I am discussing the phenomenon of PE/PC firms who are taking stakes in medical management companies both private and public, as many PE firms do nowadays. Mednax, at least when they still had American Anesthesiology, was still subject to the whims of these firms due to the large ownership stakes they held (i.e. Starboard with its 10%), regardless of the fact that they were public with an "independent" board of directors. The boards and C-suites of public companies like Mednax are ultimately beholden to shareholders, and Starboard is a big, activist shareholder.

You are repeatedly trying to make the distinction that because Starboard also invests in publicly traded corporations such as Mednax, they are irrelevant to the topic at hand, i.e. private equity. I am saying to you that this is 100% incorrect and an artificial distinction. Please consider the fact that Starboard took a large stake in Envision in October of 2017, and due to Starboard's strategic vision, financial plan, and pressure on Envision leadership, they were acquired by KKR less than a year later for $5 billion.. This is exactly the same MO as a "short term flip" which is why it's fair to include Starboard in the discussion. Envision, Mednax and most other management companies, public or private, are not lumbering megacap behemoths like Walmart or Apple with large, diverse shareholder floats and 20 year plans, so the fact that some public firms exist for decades without spinning off subsidiaries is irrelevant.
 
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The difference between a public company and private equity is how they raise capital, not how they deploy it. PE offerings can only go to accredited investors, have fewer reporting requirements, are generally less liquid, and are considered higher risk to the investor.

 
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The difference between a public company and private equity is how they raise capital, not how they deploy it. PE offerings can only go to accredited investors, have fewer reporting requirements, are generally less liquid, and are considered higher risk to the investor.

Higher risk. Higher reward.

it’s a shell game. How many times did Sheridan go public than private? Than public again? each time they go public the investors make money.

that is the key to these management firms. To go iPo.

Right now (today’s market June 1 2020) for amc is zero. As in zero buyer for market or beyond market price. This is why usap private equity welsh Carson is stuck. They make 20% of what usap practices generate. But anesthesia over head is very high. Labor cost. So the last 2 months. They have been negative due to decrease in cases.

Private equity does not want to run anesthesia long term. We all know that. Payor mix changes over the years. So the profitable usap places only as profitable as their private insurance market. This is what mednax American anesthesiology ran into. Payor mix and growth. Once usap started. Mednax had less options to skim off. The most profitable practices went to usap. Eventually and we are seeing it now. It’s been 5 plus years for Usap. The growth for usap is grinding. The last couple of practices that I know of usap purchase. The original partners have gotten less than 800k. Yes 800k and less. And some stock. But not like the original usap formation. Those practices had majority of partners in their 50s. They were under pressure from hospital systems. They took what they could get. 800k plus stock is better than $0 if hospital awards anesthesia contract to another amc.
 
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The difference between a public company and private equity is how they raise capital, not how they deploy it. PE offerings can only go to accredited investors, have fewer reporting requirements, are generally less liquid, and are considered higher risk to the investor.


The point is that with management companies it ends up being a revolving door where many of the same players end up making money on both ends of the taking public or going private continuum. In regard to the reporter's original question, there's no big distinction to be made though between how badly the average new grad gets f'ed over by joining an AMC practice who has corporate backers/shareholders, regardless of whether that AMC is currently private or public at the moment. In either case the new grad likely getting their productivity skimmed off quite badly, there is no partnership, or if there is partnership it's not really a "true" partnership plus you still have to buy some shtty public/private ponzi stock.
 
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Can you next write about or tie into this piece how nurses are being cut loose to practice independently in hospitals in place of physicians, all behind the public’s back, and all due to lobbying efforts and political agendas? There is no regard for patient safety in this equation, and all politicians and hospital administrators are looking at is their bottom line. I will be the first to admit that this topic needs to be written tastefully since the slightest negativity towards nurses, especially during this pandemic, can probably sink your career and cause the rabid nursing unions to unleash the hounds on you, but this is a topic that the mainstream media is failing the public by not reporting on and talking about on a national level. Thanks.

Perfect example of this is at the VA in regards to nurse Anesthetists. This issue had been debating extensively for the prior 6 years. Was open for public comment for considerable time. About 6 months ago final resolution rule was adopted with bipartisan support. This rule continued the long tradition of physician led anesthesia care at the VA in a care team model. This model is consistent with physician supervision of nurse Anesthetists. During the covid pandemic, elective surgeries were canceled. There was never a shortage of anesthesia providers. Without consult of the public or VA anesthesiologists, Dr Richard Stone (executive in charge of VA health care), sent directive 1899 (https://www.asahq.org/-/media/sites...hash=D3D7D8D9C5F2BA30F75C48227A270724A546DC4E) which erased all prior legislation with one signature. Allowing independent practice of anesthesia services by nurse Anesthetists at the VA. To state how unprecedented this is, and for a frame of reference, only 4 states currently allow such a situation (satisfying both CMS regulations and individual state laws)- these states account for about 3% of the US population. The American Society of Anesthesiologists, together with a unified VA Department of Anesthesiology, has sent strong and urgent recommendations to withdraw this unneeded, unpopular, and tremendously unsafe directive. There is no indication that the VA intends this to be a temporary change at present. I urge anyone reading this to contact their congressional and senate representatives immediately to support physician-led care of anesthesia services for our veterans.


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Mman

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I think you are the one who is confusing things. I am discussing the phenomenon of PE/PC firms who are taking stakes in medical management companies both private and public, as many PE firms do nowadays. Mednax, at least when they still had American Anesthesiology, was still subject to the whims of these firms due to the large ownership stakes they held (i.e. Starboard with its 10%), regardless of the fact that they were public with an "independent" board of directors. The boards and C-suites of public companies like Mednax are ultimately beholden to shareholders, and Starboard is a big, activist shareholder.

You are repeatedly trying to make the distinction that because Starboard also invests in publicly traded corporations such as Mednax, they are irrelevant to the topic at hand, i.e. private equity. I am saying to you that this is 100% incorrect and an artificial distinction. Please consider the fact that Starboard took a large stake in Envision in October of 2017, and due to Starboard's strategic vision, financial plan, and pressure on Envision leadership, they were acquired by KKR less than a year later for $5 billion.. This is exactly the same MO as a "short term flip" which is why it's fair to include Starboard in the discussion. Envision, Mednax and most other management companies, public or private, are not lumbering megacap behemoths like Walmart or Apple with large, diverse shareholder floats and 20 year plans, so the fact that some public firms exist for decades without spinning off subsidiaries is irrelevant.

Nah. I've never said a good word about anybody purchasing private anesthesia groups. But if I had to work for one, I would far prefer to work for a publicly traded company than a PE backed private venture. The economic incentives for your overlords are quite different in those situations. There are vast differences between a company that was just teetering outside the S&P 500 like Mednax and had investors for PE groups that had no seats on the board and companies that are like 50-60% backed by PE and essentially work for them.
 

vector2

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Nah. I've never said a good word about anybody purchasing private anesthesia groups. But if I had to work for one, I would far prefer to work for a publicly traded company than a PE backed private venture. The economic incentives for your overlords are quite different in those situations. There are vast differences between a company that was just teetering outside the S&P 500 like Mednax and had investors for PE groups that had no seats on the board and companies that are like 50-60% backed by PE and essentially work for them.

You're saying Envision's economic incentives were so different between being public in mid 2017 to being taken private in 2018 that a new grad hired by them in the two different time periods would've also had a significantly different compensation and workload? That's quite an implication
 

Mman

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You're saying Envision's economic incentives were so different between being public in mid 2017 to being taken private in 2018 that a new grad hired by them in the two different time periods would've also had a significantly different compensation and workload? That's quite an implication

Envision was going bankrupt and unable to function going forward without somebody bailing them out. That would seem to at least be a slightly relevant point if you want to talk specifics. But yes, if my parent company is going bankrupt I would have concerns about my job going forward.
 

vector2

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Envision was going bankrupt and unable to function going forward without somebody bailing them out. That would seem to at least be a slightly relevant point if you want to talk specifics. But yes, if my parent company is going bankrupt I would have concerns about my job going forward.

So if anything the average MD would have been in worse financial shape wrt compensation, benefits, job security, and workload before the full PE takeover? I thought the point you were trying to make is that it's so much better working for a publicly traded AMC because their financial incentives are measurably different. My bet is that anyone who has ever been a non-partner at the average teamhealth, Sheridan/envision, mednax/american anesthesiology practice when they were public was probably having just as bad an experience as someone at napa or somnia.
 

Mman

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So if anything the average MD would have been in worse financial shape wrt compensation, benefits, job security, and workload before the full PE takeover? I thought the point you were trying to make is that it's so much better working for a publicly traded AMC because their financial incentives are measurably different. My bet is that anyone who has ever been a non-partner at the average teamhealth, Sheridan/envision, mednax/american anesthesiology practice when they were public was probably having just as bad an experience as someone at napa or somnia.

nah, my buddy worked for Mednax for 8 years as a nonpartner and he was paid fairly well and treated fairly.

All things being equal, you'd much rather work for the large public corporation instead of the PE firm that is looking to sell you out to someone else in 4 years. But you should also make sure your public firm isn't going bankrupt.
 

vector2

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nah, my buddy worked for Mednax for 8 years as a nonpartner and he was paid fairly well and treated fairly.

All things being equal, you'd much rather work for the large public corporation instead of the PE firm that is looking to sell you out to someone else in 4 years. But you should also make sure your public firm isn't going bankrupt.

That's a cool anecdote and all (got any verifiable details of his compensation, benefits, supervision ratio and hours?), but there's also some people sporadically pulling down 450 at Northstar, but I wouldn't be jumping to recommend one go out and join that founded-in-part-by-a-CRNA organization. Same goes for the folks who do "OK" at USAP after being forced to buy that ridiculous stock.

But to get back to your main point, literally every major public AMC as of last month has been spun off or taken private now by a PE firm. You should've just stopped at "all things being equal" because it appears that all things are pretty equal inasfar as public AMCs having the same financial pressure (aka the tremendous burden they perceive to be their physicians' salaries) as everyone else and thus being willing to "sell you out" just like everyone else if it means a boon for their largest or their activist shareholders.
 
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Mman

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That's a cool anecdote and all (got any verifiable details of his compensation, benefits, supervision ratio and hours?), but there's also some people sporadically pulling down 450 at Northstar, but I wouldn't be jumping to recommend one go out and join that founded-in-part-by-a-CRNA organization. Same goes for the folks who do "OK" at USAP after being forced to buy that ridiculous stock.

But to get back to your main point, literally every major public AMC as of last month has been spun off or taken private now by a PE firm. You should've just stopped at "all things being equal" because it appears that all things are pretty equal inasfar as public AMCs having the same financial pressure (aka the tremendous burden they perceive to be their physicians' salaries) as everyone else and thus being willing to "sell you out" just like everyone else if it means a boon for their largest or their activist shareholders.

nah, just commenting on economics and incentives. With PE owning you there is literally 0% chance they will not be looking to cash out to someone else in 5 years or less. With a public company, there is a chance they could want to be in it for the long term if the business remains viable.
 

vector2

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nah, just commenting on economics and incentives. With PE owning you there is literally 0% chance they will not be looking to cash out to someone else in 5 years or less. With a public company, there is a chance they could want to be in it for the long term if the business remains viable.

"There is a chance" is also currently ~0% in regard to what were publicly traded AMCs who all ended up cashing out (or is there some secret cache of publicly traded AMCs paying their non-partner docs big $$$ that I don't know about?). Your generality about economic incentives and publicly traded corporations does not generalize to the business of anesthesia and medical management companies.
 
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Mman

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"There is a chance" is also currently ~0% in regard to what were publicly traded AMCs who all ended up cashing out (or is there some secret cache of publicly traded AMCs paying their non-partner docs big $$$ that I don't know about?). Your generality about economic incentives and publicly traded corporations does not generalize to the business of anesthesia and medical management companies.

Sure it does, there were non partners working for Mednax for more than a decade that were happy with their jobs.
 

aneftp

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Sure it does, there were non partners working for Mednax for more than a decade that were happy with their jobs.
yeah. All of the amc are locally run. Just depends on which mednax place you worked for. I remember when one place sold out to mednax. And all they were offering for new employees was 7pm-7am Friday Saturday and Sunday and one weekday day shift. It’s like wtf. Those are grave yard shifts the original partners tried to off load their weekend work load. While they take the easier 2pm weekday calls with post call days off.
 

vector2

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Sure it does, there were non partners working for Mednax for more than a decade that were happy with their jobs.

Again, your anecdote about one Mednax employee or practice does not negate the totality of how the average job was at TeamHealth/Envision/Sheridan/Mednax/American Anesthesiology when they were publicly traded. There were/are occasionally decent jobs everywhere. Overall though, working for an AMC regardless of whether it was public (and inevitably on its way to a being taken private by a PE firm) or actually private is still a raw deal compared to most other jobs.

I don't know what kind of angle you're coming at this issue with in regard to your repeated attempts to shoehorn public AMCs into the class of "benevolent publicly traded companies with responsible, fair, employee-loving boards and C-suites who won't F over a new grad or non-partner" .....but it's bizarre and does not gel with the reality which is that all the companies listed above had their anesthesia divisions or stocks taken private in deals that significantly benefited their largest PE or activist investors.
 

vector2

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1591144218691.png



JANA held only 8% of the shares and was able to push this through, yet mman is still trying to argue that an AMC has some kind of unique, benevolent characteristic just because it was publicly traded.
 
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