Starting a group to contract with local facilities

[heyjack70]

I've heard of people doing this but have no idea about the logistics involved.

How do people go about starting a psychiatry group in an area with very limited psych resources, consolidate the existing psych resources (MD, np's) and be able to contract the group back to the hospital, and potentially other area needs (community mental health, jail, residential programs, etc). Is this usually a better financial setup compared to doctors being directly employed by the hospital? One clear advantage is the group would recoup the financial benefit of having np's; as an employed doc the large health systems pay a pittance for a couple hours of supervision per week, even though the savings over a psychiatrist is easily $100K and more. Any books or seminars discussing this?

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[dl2dp2]

When you want to start a business, you need to think about your value proposition. You want to scoop the facility employees into a group, then re-negotiate the contract so the hospitals pay you more per hour. Why would the hospital do that instead of just hiring a new person?

 

[heyjack70]

When you want to start a business, you need to think about your value proposition. You want to scoop the facility employees into a group, then re-negotiate the contract so the hospitals pay you more per hour. Why would the hospital do that instead of just hiring a new person?

Hiring is a big challenge. It's a smaller city with very limited psych resources. A recent open position took them two years to fill with a new psychiatrist....and they didn't really recruit the doctor, the doc had family here and basically recruited themselves. So if the employed docs shifted to a private group the hospital would probably need locums or contract with the new group...with the group I'm sure being cheaper. And locums aren't growing on trees either, it would probably take 3 months at best to onboard a locums based on recent experience. And to hire 3-4-5 locums... that would be very challenging.

 

[Sushirolls]

Good idea. Now the next level is logistics. Why do people want to work for you or this group? Will the gains surpass their current setup? Why would an independent person give up autonomy for this group? It's a difficult 'activation energy' in chemistry speak for some one to give up the devil they know. Most docs are sheeple and actually want the Big Box shops to direct them - they are institutionalized. Why will the insurance companies pay your group more over the Big Box non-profit hospital they cites their non-profit status and other things to secure higher reimbursement despite failing to deliver the services they claim they will.

It's a grand idea to be the big group that delivers care in all the settings. But you forget, each setting requires time and coverage. People avoid certain jobs because of those extras. For instance some people only wanted to do IP but no CL. If your job demands they cover CL they'll simply get a job elsewhere.

Two big asks, that people live in area already hard to recruit for and now also to do extra services they don't have to at other jobs.

 

[Sushirolls]

I have also witnessed the stupidity of a health system hemorrhage money on locums in multiple specialties because they didn't want to do a little extra to keep the quality talent they had. They stole money from their docs, or valued mid management over the docs. Year after locums milked that cream filled cow. And the hospital just didn't care. Don't be surprised if the stupidity that has this hospital in its jam in the first place is the same thing that causes them to resist with locums circling thru and keeping the contracts away from you.

 

[dl2dp2]

Hiring is a big challenge. It's a smaller city with very limited psych resources. A recent open position took them two years to fill with a new psychiatrist....and they didn't really recruit the doctor, the doc had family here and basically recruited themselves. So if the employed docs shifted to a private group the hospital would probably need locums or contract with the new group...with the group I'm sure being cheaper. And locums aren't growing on trees either, it would probably take 3 months at best to onboard a locums based on recent experience. And to hire 3-4-5 locums... that would be very challenging.

If a job really took 2 years to fill, does it really need to exist? LOL That's always my question. It's clearly not critical enough for them to dump enough resources into it.

If they can't find people for 2 years, what makes you think that the contract management organization that you will start will be able to find people expediently? What's the value add?

 

[heyjack70]

Good idea. Now the next level is logistics. Why do people want to work for you or this group? Will the gains surpass their current setup? Why would an independent person give up autonomy for this group? It's a difficult 'activation energy' in chemistry speak for some one to give up the devil they know. Most docs are sheeple and actually want the Big Box shops to direct them - they are institutionalized. Why will the insurance companies pay your group more over the Big Box non-profit hospital they cites their non-profit status and other things to secure higher reimbursement despite failing to deliver the services they claim they will.

It's a grand idea to be the big group that delivers care in all the settings. But you forget, each setting requires time and coverage. People avoid certain jobs because of those extras. For instance some people only wanted to do IP but no CL. If your job demands they cover CL they'll simply get a job elsewhere.

Two big asks, that people live in area already hard to recruit for and now also to do extra services they don't have to at other jobs.

Thanks for your insights. I agree you'd need absolute consensus with the group that they wanted to shift away from the hospital employed model. To keep it simple, imagine just inpatient docs/nps would leave and the group would contract back for the same inpatient/CL coverage they're already doing. So no extra services. I'd think the private group could even charge a premium to cover consults or emergency room boarded patients, where for the currently employed docs it's bundled into the salary. Are groups doing this and making out better than hospital employees?

 

[heyjack70]

If a job really took 2 years to fill, does it really need to exist? LOL That's always my question. It's clearly not critical enough for them to dump enough resources into it.

If they can't find people for 2 years, what makes you think that the contract management organization that you will start will be able to find people expediently? What's the value add?

it was filled with a locums for 2 years. So the value is not paying locums rates. And....if the private group could contract for higher rates, the private group could theoretically pay more, or offer some ownership/partner options, and be better poised to recruit new doctors. Maybe my math is wrong, but if you could pay an inpatient doc $300K, and you paired them with an np from the same group and paid the psychiatrist the difference to supervise...an extra $100K per np supervised this would be pretty attractive and could help recruitment.

 

[Sushirolls]

it's been filled with a locums for 2 years. So the value is not paying locums rates.

That is true. That is logic. But people running hospitals are deficient in this in many places.

Hospital admin are also prone to emotions and when they see they are getting effed they will simply black mark you all and just not care. Or they see it as an opportunity to get the local newspaper to do an article on how you all are the bad guys and they have no choice but to close the unit down and end psych services which they've wanted to do for years. You just gave them a perfect exit.

You must be prepared for all of this.

The best prevention is if there are no non competes. All people keep their privileges active in the hospital. The new medical group structure is formed months in advance. The contracts with most insurance are established with that tax ID months in advance. All parties give their notice on the same day and also get local newspaper to announce it on same day too. That effective X days in the future the new medical group will be offering seamless coverage. Essentially read and know the current employee contracts and hospital privileges bylaws.

This way the hospital admin get caught unawares but are grateful services are still continuing despite losing the whole service line under their employ

 

[dl2dp2]

it was filled with a locums for 2 years. So the value is not paying locums rates. And....if the private group could contract for higher rates, the private group could theoretically pay more, or offer some ownership/partner options, and be better poised to recruit new doctors. Maybe my math is wrong, but if you could pay an inpatient doc $300K, and you paired them with an np from the same group and paid the psychiatrist the difference to supervise...an extra $100K per np supervised this would be pretty attractive and could help recruitment.

Why don't you offer yourself up first? If you can cover the service with this and save the hospital a ton of money I'm sure they'll play ball. Unfortunately, I predict it'll not be that easy.