This is How Lucrative AMCs Are

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This is something I don't exactly understand. If there's enough faith in the future of anesthesia billing that hedge funds and private equity firms (who hire brilliant PhDs to run sophisticated models to determine where to put their money) are falling over themselves to buy our accounts receivable, why don't the anesthesia practices themselves have enough faith in that same future to resist the take-over?

Yeah, yeah, yeah, I understand the plight of the 52-year-old partner who wants his 1.2 million cash buy-out, but if the hedge funds think there's a future in anesthesia billing, maybe the groups should see that, too.
 
This is a merger between Sheridan and Amsurg. No individual "partners" of some small firm are making out like bandits. It's a 'cash-and-stock' deal with a lot of handcuffs that prevent people who will benefit from walking away.

The solution? Refuse to work for these guys. And it's soon going to be high time that the the FTC is going to start looking not so favorably on exclusive contracts at the facilities these megagroups operate at. That is to say that there may be an overturn of the Sheridan anti-trust precedent - specifically in Anesthesia - from the early 1980's. If that happens "poof" these big anesthesia service conglomerates are gone daddy gone.
 
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So Amsurg purchase Sheridan because they think the FTC is about to rule against them? These guys are well connected and know the landscape much better than any of us. They see the next 12-24 months quite clearly.

Groups are selling out because insurance companies are liars, Hospital CEOs are thieves and Physicians are poor business people. This means the AMC is the future because they have better contracts, better lawyers and MBAs to deal with hospital CEOS as well as political connections in Washington.
 
So Amsurg purchase Sheridan because they think the FTC is about to rule against them?

No, because they know (and my past experience is a guide) that most anesthesiologists are spineless, lazy couldn't-care-less (at least the breed immediately my senior) fatcats who are only interested in how much money they can make off the backs of other people's hard work... and will never have the deep pockets or testicular fortitude to challenge them with a Sherman anti-trust lawsuit.

It's the 'if you can't beat 'em, join 'em' mentality. Anesthesia as an independent true private practice institution is D-E-A-D. Unless and until someone has a balls to challenge these bean counters.
 
So $2.4 billion for an organization that has 2,400 physicians and healthcare providers. That's $1M per provider.

For an roi of 5% that's 50k per provider per year. 10% would be 100k profit per provider a year.
 
Do you know what AmSurg offers their physicians? You will soon discover why the company makes the money they do.
 
So $2.4 billion for an organization that has 2,400 physicians and healthcare providers. That's $1M per provider.

For an roi of 5% that's 50k per provider per year. 10% would be 100k profit per provider a year.

Exactly. They'll take a minimum of 50-100k from everyone. It isn't a vote of confidence in anesthesia billing because they'll take 'their' money whether your billing falls or not.
It's what I've been saying for months. 'Partners' aren't selling a business, they are selling OUR future income. If they could, they'd sell you into slavery and take 100% of your future income.
 
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Do you know what AmSurg offers their physicians? You will soon discover why the company makes the money they do.
Oh yeah. Essentially you are on a long term locums contract with 30 days notice at many of their facilities. They give you no benefits. No paid time off. Nada.
 
Oh yeah. Essentially you are on a long term locums contract with 30 days notice at many of their facilities. They give you no benefits. No paid time off. Nada.

If this is true don't plant any roots wherever you take a job with them. Don't buy a house. Don't put your kids in school. Don't establish yourself in the local community.

They've got you by the short hairs in this kind of deal.

I'm not sure how we got to the point that we let other people use our licenses to collect money for work we do and at the same time dictate how we're going to do that work. It's insane. When are people just going to finally stand up and say "no, I'm not going to do that." Have we seriously gotten that chickenshit in this profession?
 
It's what I've been saying for months. 'Partners' aren't selling a business, they are selling OUR future income. If they could, they'd sell you into slavery and take 100% of your future income.

As a partner in a private group that hasn't "sold out", what exactly do I owe to a person I've never met? If my choice in the future comes down to my group losing it's hospital contract to an AMC or pre-emptively selling out to a different AMC that offers me a decade of job security, what is the right choice? Should I risk personally going down in flames to protect a theoretical ideal that I may have?

It's easy to talk tough about standing up to the man and taking a stand when it isn't your personal livelihood at stake. When it's your neck on the line and your ability to pay the bills for you and your family on the line, the perspective might change a little especially when whatever you might be standing up for is future physicians you have never met.
 
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When it's your neck on the line and your ability to pay the bills for you and your family on the line, the perspective might change a little especially when whatever you might be standing up for is future physicians you have never met.

This is exactly what they are counting on. And the sentiment you express here is a goddamn shame.
 
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If this is true don't plant any roots wherever you take a job with them. Don't buy a house. Don't put your kids in school. Don't establish yourself in the local community.

They've got you by the short hairs in this kind of deal.

Do you have that same advice for 99% of the working public? Should a bank branch manager not plant any roots or buy a house? Should the shift manager at Home Depot not put their kids in school?

When physicians end up in a situation where they are an employee instead of a private contractor, they are obviously at the whims of their employer to some extent and will face the exact same market pressures that every employee faces where the company needs to make money or they will cut costs. That's the world almost everybody lives in.

IMHO the only thing that will change when a majority of physicians are employees is that it will be much easier to forge some sort of physician union and/or threaten strikes. Can't and won't ever happen in a situation where the docs are independent contractors because the ramifications would be painful and patients would suffer. But if we all work for the man? A little easier to see it happening.
 
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This is exactly what they are counting on. And the sentiment you express here is a goddamn shame.

And to that I'd tell a future person I've never met to go stick things where the sun don't shine. And I'm saying this as someone that has resisted 20+ offers to sell out. But if you think I should stake my personal professional life on preserving something for someone I've never met I'd say get real. Every person on the planet acts selfishly and looks out for themselves. Even altruistic acts are made so that the person doing it feels better and so it is also selfish in it's own way. The number of major acts committed by people that harm themselves to save others they don't know are truly miniscule.
 
Do you have that same advice for 99% of the working public?

Listen. What is going on right now is a clear violation of the Sherman anti-trust statutes. What needs to happen is that someone has to grow a pair of balls and challenge this horse**** in the courts. What these companies are doing is illegal and they should not be able to bully doctors into taking ****ty jobs with low pay using their licenses to collect fees and take a cut - which is exactly what's happening. Greed and laziness on our profession's part has allowed this. Also partly due to the fact that there are not enough bodies to do the job.

I don't think anyone should establish themselves until they've figured out a way to do so securely. I'm not anymore. I'm in lockdown mode. I'm watching my own ass. I'm saving as much money as I can and trying to diversify my talents. That's the only advice I would give anyone and everyone right now. As you've pointed out, you only care about yourself and your family. You're willing to say f*** you to your profession to save your own ass. Why should I be any different?
 
Listen. What is going on right now is a clear violation of the Sherman anti-trust statutes. What needs to happen is that someone has to grow a pair of balls and challenge this horse**** in the courts. What these companies are doing is illegal and they should not be able to bully doctors into taking ****** jobs with low pay using their licenses to collect fees and take a cut - which is exactly what's happening. Greed and laziness on our profession's part has allowed this. Also partly due to the fact that there are not enough bodies to do the job.

I don't think anyone should establish themselves until they've figured out a way to do so securely. I'm not anymore. I'm in lockdown mode. I'm watching my own ass. I'm saving as much money as I can and trying to diversify my talents. That's the only advice I would give anyone and everyone right now. As you've pointed out, you only care about yourself and your family. You're willing to say f*** you to your profession to save your own ass. Why should I be any different?

My lawyer friends disagree with your personal stance on Sherman anti-trust issues. For one thing it really only applies to interstate commerce. It's hard to argue that providing anesthesia services at a hospital is interstate commerce. For another they generally to show some restriction of competition. With current hospital setups in terms of anesthesia contracts, there is no restriction of competition since any group can really bid for any contract at any time. If Napa or Mednax has a contract at a hospital, that doesn't prevent your private group from approaching that hospital's administration and offering to undercut their bid and take the contract from them.

Also, please don't get mad at me. You should be holding me up as the platonic ideal for private practice. I have stuck up for my own profession and I have done so at risk of my own ass. I just can't predict the future. I know personally if my choice was having a job or being broke and on the street I'd choose to have a job and say f*** you to the whiny people I've never met that make a moral judgment about that choice.
 
It's hard to argue that providing anesthesia services at a hospital is interstate commerce.

These are multistate companies who compete for services across regions and send doctors/CRNAs to-and-fro to fill requirements of individual contracts.

For another they generally to show some restriction of competition.

Restrictive contracts are in and of themselves anti-competitive. There was a huge early 1980's case (I already quoted somewhere on this forum) about tying of services where an anesthesia group won the right to keep a restrictive contract. This essentially set the precedent. But the time and the circumstances were far different from what they are now.

With current hospital setups in terms of anesthesia contracts, there is no restriction of competition since any group can really bid for any contract at any time. If Napa or Mednax has a contract at a hospital, that doesn't prevent your private group from approaching that hospital's administration and offering to undercut their bid and take the contract from them.

They are often time and monetarily restrictive. And if they create an environment where in a region there is no way to have meaningful competition then they are anti-competitive. For example, it would be very difficult with covenants not to compete to get enough anesthesiologists to move to an area to challenge such a contract if the contracting party already has gobbled up all the contracts in the area.
 
As a partner in a private group that hasn't "sold out", what exactly do I owe to a person I've never met? If my choice in the future comes down to my group losing it's hospital contract to an AMC or pre-emptively selling out to a different AMC that offers me a decade of job security, what is the right choice? Should I risk personally going down in flames to protect a theoretical ideal that I may have?

It's easy to talk tough about standing up to the man and taking a stand when it isn't your personal livelihood at stake. When it's your neck on the line and your ability to pay the bills for you and your family on the line, the perspective might change a little especially when whatever you might be standing up for is future physicians you have never met.

You don't owe them anything, but not robbing them isn't the same as giving them something. If you get a million dollars to facilitate an AMC robbing several other docs for millions, then you are an evil SOB. AMCs are evil thieves and if you sell to them, you are an evil thief; but as far as I know everyone accepts payment in blood money, so enjoy your ill-gotten gains, should you ever take them.
 
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Here's the rub regarding Sherman anti-trust right here (quoted from another lawsuit in Minnesota where this was analyzed and debated):

Jefferson Parish involved an exclusive contract between a New Orleans hospital and a group of anesthesiologists to provide anesthesia services at the hospital. The agreement was challenged by an excluded anesthesiologist. The court of appeals ruled for the plaintiff, concluding the hospital had illegally "tied" anesthesia services to its other surgery services. The Supreme Court reversed. The Court's lead opinion applied its tying precedents and concluded, "there has been no showing that the market as a whole has been affected at all by the contract." 466 U.S. at 31. But the four concurring Justices concluded the tying precedents were inapplicable and analyzed whether this exclusive dealing contract was an unreasonable restraint on trade:

Exclusive dealing is an unreasonable restraint on trade only when a significant fraction of buyers and sellers are frozen out of a market by the exclusive deal. When the sellers of services are numerous and mobile, and the number of buyers is large, exclusive-dealing arrangements of narrow scope pose no threat of adverse economic consequences. To the contrary, they may be substantially procompetitive by ensuring stable markets and encouraging long-term, mutually advantageous business relationships.

At issue here is an exclusive-dealing arrangement between a firm of four anesthesiologists and one relatively small hospital. There is no suggestion that East Jefferson Hospital is likely to create a "bottleneck" in the availability of anesthesiologists that might deprive other hospitals of access to needed anesthesiological services, or that the [favored anesthesiologists] have unreasonably narrowed the range of choices available to other anesthesiologists in search of a hospital or patients that will buy their services. . . . Even without engaging in a detailed analysis of the size of the relevant markets we may readily conclude that there is no likelihood that the exclusive-dealing arrangement challenged here will either unreasonably enhance the hospital's market position relative to other hospitals, or unreasonably permit [the favored anesthesiologists] to acquire power relative to other anesthesiologists. Accordingly, this exclusive-dealing arrangement must be sustained under the rule of reason.

http://law.justia.com/cases/federal/appellate-courts/F3/208/655/592936/

In other words, the fact that Amsurg and Sheridan are proposing to merge has substantially changed the playing field. And the fact is that there does indeed now exist the likelihood that the exclusive-dealing arrangement that Amsurg and Sheridan will enjoy will "unreasonably enhance their market position relative to other hospitals". And, for that I think they are rife for a huge anti-trust lawsuit.
 
You don't owe them anything, but not robbing them isn't the same as giving them something. If you get a million dollars to facilitate an AMC robbing several other docs for millions, then you are an evil SOB. AMCs are evil thieves and if you sell to them, you are an evil thief; but as far as I know everyone accepts payment in blood money, so enjoy your ill-gotten gains, should you ever take them.


No one is getting robbed. It is the American way. Those with capital own the business and the owners get the lion's share of profits. Mcdonalds franchise owners are not robbing the burger flippers. Walmart is not robbing their cashiers. Future doctors can decide to accept a job offer or not. But I do acknowledge the landscape is changing.

Mman has a right to sell his practice because it's his. What if you owned something valuable and someone told you you are not allowed to sell it? I do believe there is a finite window to sell. As I have said before, the choice is to sell out or be pushed out. I've seen both.
 
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You don't owe them anything, but not robbing them isn't the same as giving them something. If you get a million dollars to facilitate an AMC robbing several other docs for millions, then you are an evil SOB. AMCs are evil thieves and if you sell to them, you are an evil thief; but as far as I know everyone accepts payment in blood money, so enjoy your ill-gotten gains, should you ever take them.

What other doctors are being robbed? You can't argue that somebody 3000 miles away in medical school would be getting robbed. Our practice is not a pyramid scheme so every single physician would be getting paid by the AMC in order to work for the AMC.

I'm amazed at the sheer contempt for capitalism by some here. AMCs aren't evil. Mednax, for one, is a publicly traded corporation that is seeking to increase their corporate earnings. They don't rape, murder, or pillage anybody. They offer to purchases business from business owners in the hope/expectation that they can create a higher profit margin from that business than the current owners are capable of generating.

Don't hate the player, hate the game.

I personally dislike the trend in medicine of large corporations controlling physician practices. Not my cup of tea. But it doesn't offend my sensibilities as an American and I understand why it is happening.
 
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These are multistate companies who compete for services across regions and send doctors/CRNAs to-and-fro to fill requirements of individual contracts.

Restrictive contracts are in and of themselves anti-competitive. There was a huge early 1980's case (I already quoted somewhere on this forum) about tying of services where an anesthesia group won the right to keep a restrictive contract. This essentially set the precedent. But the time and the circumstances were far different from what they are now.

They are often time and monetarily restrictive. And if they create an environment where in a region there is no way to have meaningful competition then they are anti-competitive. For example, it would be very difficult with covenants not to compete to get enough anesthesiologists to move to an area to challenge such a contract if the contracting party already has gobbled up all the contracts in the area.


I'm just going to go ahead and disagree. Furthermore my lawyers disagree. And if you are so sure of your legal position, how come you aren't successfully suing them for millions upon millions of dollars?

It's easy on an anonymous internet forum to rage against the man and proclaim how illegal everything is. I just don't think it is. I don't know any lawyers that think it is. I haven't read about any big successful legal challenges to it anywhere.
 
We'll see, Mman. Time will tell. The lawsuits will be coming.
 
What other doctors are being robbed? You can't argue that somebody 3000 miles away in medical school would be getting robbed. Our practice is not a pyramid scheme so every single physician would be getting paid by the AMC in order to work for the AMC.

I'm amazed at the sheer contempt for capitalism by some here. AMCs aren't evil. Mednax, for one, is a publicly traded corporation that is seeking to increase their corporate earnings. They don't rape, murder, or pillage anybody. They offer to purchases business from business owners in the hope/expectation that they can create a higher profit margin from that business than the current owners are capable of generating.

Don't hate the player, hate the game.

I personally dislike the trend in medicine of large corporations controlling physician practices. Not my cup of tea. But it doesn't offend my sensibilities as an American and I understand why it is happening.

"...that they can create a higher profit margin..." Ahh, there's the rub. As anesthesiologists in the US, we are still engaged in a fee-for-service profession, fundamentally, however the individual doctor's compensation is determined. There isn't much overhead in operating an anesthesia practice (and the costs are pretty predictable, by and large). I just don't buy that TeamHealth, Sheridan, Somnia, Napa, Docs-r-us or Wal*Mart are just that much more clever that they actually make more "profit"- because what is "profit", exactly, in a fee-for-service, low-overhead business such as ours? That is to say, it's pretty easy to track that one unit of work by Dr. A brings in one unit of revenue to the practice (unlike, say, the engineer at Microsoft whose efforts only show up indirectly, if ever, in a final product). So this "profit" is essentially a rent that is being extracted by the AMC- money that otherwise would have gone to the physician who earned it. After all, that's what would happen if Dr. A was engaged in a solo practice.

So does that explain what rankles just a few of us?

And to put it another way, what transformative process is being coordinated by the corporation that isn't possible by the individual practitioner? What risks are being borne by the corporation to ensure the practitioner gets their salary? Not much, to both, I'd say. To me, it just seems like their function is parasitic. But do enlighten me as to how I am misinformed.
 
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"...that they can create a higher profit margin..." Ahh, there's the rub. As anesthesiologists in the US, we are still engaged in a fee-for-service profession, fundamentally, however the individual doctor's compensation is determined. There isn't much overhead in operating an anesthesia practice (and the costs are pretty predictable, by and large). I just don't buy that TeamHealth, Sheridan, Somnia, Napa, Docs-r-us or Wal*Mart are just that much more clever that they actually make more "profit"- because what is "profit", exactly, in a fee-for-service, low-overhead business such as ours? That is to say, it's pretty easy to track that one unit of work by Dr. A brings in one unit of revenue to the practice (unlike, say, the engineer at Microsoft whose efforts only show up indirectly, if ever, in a final product). So this "profit" is essentially a rent that is being extracted by the AMC- money that otherwise would have gone to the physician who earned it. After all, that's what would happen if Dr. A was engaged in a solo practice.

So does that explain what rankles just a few of us?

And to put it another way, what transformative process is being coordinated by the corporation that isn't possible by the individual practitioner? What risks are being borne by the corporation to ensure the practitioner gets their salary? Not much, to both, I'd say. To me, it just seems like their function is parasitic. But do enlighten me as to how I am misinformed.


1. Better contracts with insurance companies- 20-30% higher on average
2. Better negotiating skills with administrators
3. Extremely low Billing services/Collections- around 1.5%
4. Prevent any one partner from abusing the others by not taking call
5. Prevent "senior" partners from paying employees $100K while they earn $800K
6. Fairness to the work assignments/cases
 
1. Better contracts with insurance companies- 20-30% higher on average


I maintain it's about 50-100% higher than most groups they are picking off, at least in terms of Mednax. I do not know what some of the other AMCs are getting for contract rates, but Mednax is killing it.
 
I maintain it's about 50-100% higher than most groups they are picking off, at least in terms of Mednax. I do not know what some of the other AMCs are getting for contract rates, but Mednax is killing it.

Ask yourself why Mednax can negotiate higher rates?

Because they are bigger and control certain regions.

It's just not mednax. hospitals systems control areas and command higher markup's from insurers as well.

To prohibit docs from colluding together to form their own monopoly or duopoly forces them to compete at a disadvantage in this area of super mergers. It raises prices for consumers (insurers). That's where the lawsuit angle will be played.
 
Ask yourself why Mednax can negotiate higher rates?

Because they are bigger and control certain regions.

It's just not mednax. hospitals systems control areas and command higher markup's from insurers as well.

To prohibit docs from colluding together to form their own monopoly or duopoly forces them to compete at a disadvantage in this area of super mergers. It raises prices for consumers (insurers). That's where the lawsuit angle will be played.

I'm well aware of what angle someone could approach this from. This has been going on for nearly a decade and there have been no successful major lawsuits about it so far. Seems to me it probably isn't so straight forward legally.
 
Ask yourself why Mednax can negotiate higher rates?

Because they are bigger and control certain regions.

It's just not mednax. hospitals systems control areas and command higher markup's from insurers as well.

To prohibit docs from colluding together to form their own monopoly or duopoly forces them to compete at a disadvantage in this area of super mergers. It raises prices for consumers (insurers). That's where the lawsuit angle will be played.

But the antitrust environment is not the same as it was 15-20 years ago. It is no longer David vs Goliath but Goliath vs Goliath. The days of David are numbered.
 
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I'm well aware of what angle someone could approach this from. This has been going on for nearly a decade and there have been no successful major lawsuits about it so far. Seems to me it probably isn't so straight forward legally.
Yes, it's very complicated. But we all know these anti competitive forces are driving salaries and income down.

One of two things will happen.

1. The Courts will rule these AMC (or super hospital etc) prevent competitive buisness practices. Remember I am not just talking anesthesia. In the Orlando area alone, essentially run by a two hospital system (Florida Hospital and Orlando health) One controls the north side of the region. The other controls the south side of the region. It's very common knowledge both hospitals collect more much for the same diagnosis as other hospital systems around the country.

2. Physicians are allowed to form unions.
 
Yes, it's very complicated. But we all know these anti competitive forces are driving salaries and income down.

IMHO the primary downward driver of income is not "anti competitive forces". It's that the people paying the bills (government and insurers) can't afford to spend what they used to spend for the same level of service.

You used to be able to balance bill insurance companies to make up for the uninsured patients you took care of. Then that became illegal and they've been dialing back reimbursement ever since. There are lots of reasons why, but the AMCs didn't invent the lessening of compensation. As an example, ophthalmologists used to collect >$3000 per eye for cataracts from Medicare. Now they are at around $600 per eye. Still lucrative, but they can't make $100K a day like they used to and that has nothing to do with anti competitive forces.
 
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If this is true don't plant any roots wherever you take a job with them. Don't buy a house. Don't put your kids in school. Don't establish yourself in the local community.

They've got you by the short hairs in this kind of deal.

I'm not sure how we got to the point that we let other people use our licenses to collect money for work we do and at the same time dictate how we're going to do that work. It's insane. When are people just going to finally stand up and say "no, I'm not going to do that." Have we seriously gotten that chickenshit in this profession?
When anesthesiology jobs with reasonable hours and reasonable salaries are available? Not everyone wants to break their backs working 60-70 hours a week for a half million a year partnership job.
This is exactly what they are counting on. And the sentiment you express here is a goddamn shame.

What's stopping you from starting your own group and securing your own contracts?
 
I don't understand why private practice groups don't merge. There are 4-5 groups in a 50 mile area, merging should make us less replaceable right? Especially with non compete clauses.
 
What's stopping you from starting your own group and securing your own contracts?

Would like like a short - or very long - answer to this incredibly naive question? We're far past the point where this is still possible.
 
I don't understand why private practice groups don't merge. There are 4-5 groups in a 50 mile area, merging should make us less replaceable right? Especially with non compete clauses.

They do. And when this happens, they basically turn themselves into AMCs. How do you think AMCs (like NAPA) got started? And if you go work for them you can't compete with them in the future... for usually at least 2 (maybe more) years.

It's a ****ing racket. Anti-competitive. Anti-trust violations. We're no longer talking the mom & pop fair anesthesia group of the 1980's when this was last challenged in the Supreme Court.
 
They do. And when this happens, they basically turn themselves into AMCs. How do you think AMCs (like NAPA) got started? And if you go work for them you can't compete with them in the future... for usually at least 2 (maybe more) years.

It's a ****ing racket. Anti-competitive. Anti-trust violations. We're no longer talking the mom & pop fair anesthesia group of the 1980's when this was last challenged in the Supreme Court.

I support large private corporations doing anesthesia. There is a reason we all shop at Costco right?. As mentioned above, they can power negotiate w insurers. Isn't that the only reason one needs?
 
Would like like a short - or very long - answer to this incredibly naive question? We're far past the point where this is still possible.

Are your arguments going to revolve around a misguided idea of there existing an era in anesthesiology where there was no competition against starting a group or a financial risk inherent in doing so?
 
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Are your arguments going to revolve around a misguided idea of there existing an era in anesthesiology where there was no competition against starting a group or a financial risk inherent in doing so?

Huh? No one is doubting that there has always been competition to get contracts at hospitals. What has changed in the past 30 years is the fact that business now is mostly done by (1) lawyering and (2) conglomeration/vertical integration of services, for better or for worse. It is the, as it was put, "Wal-marting" of our profession. Gone are the days when a handshake and a gentleman's agreement meant something.

To the point, the big change in that timeframe, which you either don't understand or ignore, is that other entities are using your medical license to bill for services you provide. This was never the case thirty years ago. You worked for a practice (that you either owned or were in the process of becoming an owner) that submitted a bill directly for services, and the arrangement was in essences that once you proved yourself worthy you would be included in an equal sharing for the work you did.

What we have now with AMCs can hardly be called a "practice" because, as an employee of that practice, you are subject (and that's the key word here) to the working arrangements they provide and contract you for. Furthermore, they often require you to sign all manner of restrictive covenants that state you can't work in the places that they provided work for you regardless as to whether or not you felt that arrangement was fair, safe, not what was promised, etc. You are usually collecting a flat salary, with no real promise of profit sharing or future ability to become a shareholder, where they can often dictate the manner in which you are going to practice. And, if you leave because you don't like it, guess what? That restrictive covenant is still in effect.

To claim that the practice environment hasn't changed is either naive or ignorant. We're not talking a town with several groups of anesthesiologists and an unlimited supply of potential future partners like in the Jefferson Parish vs. Hyde supreme court case in 1984. We're talking about massive regional groups, sometimes employing hundreds (and even over a thousand now) anesthesiologists, who are not going to let you compete against them if you don't like their deal. We're letting them use our medical licenses to make money with no real promise of future profit sharing or ability to walk away and stay in the same area with meaningful employment.

My solution? If you want to work in such an arrangement and screw yourself, don't sign a contract. Just have them hire you as an at-will employee. Sure, you can follow their employee handbook and whatnot. But, if you don't like the deal, you are free to walk away. If everyone did this, they'd be forced to change their current bullshit employment tactics.

(Apparently you wanted the long answer.)
 
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I support large private corporations doing anesthesia. There is a reason we all shop at Costco right?. As mentioned above, they can power negotiate w insurers. Isn't that the only reason one needs?

I seriously hope you're joking. Resistance is futile. You will be assimilated.
 
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I support large private corporations doing anesthesia. There is a reason we all shop at Costco right?. As mentioned above, they can power negotiate w insurers. Isn't that the only reason one needs?

So if they increase your collections from 400k to 600k but take 50% of your collections are they benefiting you? Patients? Insurers? Anyone but the sellouts who opened the door to them?
 
I support large private corporations doing anesthesia. There is a reason we all shop at Costco right?. As mentioned above, they can power negotiate w insurers. Isn't that the only reason one needs?
This is not Costco. This is Walmart.

Except that after a society does this to its doctors, nobody in their right mind will waste time and money on medical school (or that particular subspecialty). Why do you think all those foreign medical grads came to the US? They were screwed over by their own countries in the same way.

Nobody in their right mind goes to medical school to become just an exploited employee for life.
 
IMHO the primary downward driver of income is not "anti competitive forces". It's that the people paying the bills (government and insurers) can't afford to spend what they used to spend for the same level of service.

You used to be able to balance bill insurance companies to make up for the uninsured patients you took care of. Then that became illegal and they've been dialing back reimbursement ever since. There are lots of reasons why, but the AMCs didn't invent the lessening of compensation. As an example, ophthalmologists used to collect >$3000 per eye for cataracts from Medicare. Now they are at around $600 per eye. Still lucrative, but they can't make $100K a day like they used to and that has nothing to do with anti competitive forces.

That's because the technology changed such that performing a cataract took 25% as long. The advent of PACS in Radiology is a similar phenomenon.
 
Going back to what I said, if AMCs are so terrible and if they're scraping the bottom of the barrel for talent, then why don't you start your own group?
 
I don't understand why private practice groups don't merge. There are 4-5 groups in a 50 mile area, merging should make us less replaceable right? Especially with non compete clauses.
This is why groups don't merge. Again physicians can't dominant a market. Yet "corporations" like Mednax and Sheridan (Amsurg) can dominant a market. Talk about irony here. Someone needs to give the FTC a call.

http://www.anesthesiallc.com/component/content/article/335

"In 1996, the FTC issued a Business Review Letter describing why it would likely challenge the joint venture combination of five Orange County, California anesthesia practices under the antitrust laws. See, FTC Business Review Letter, Orange Los Angeles Medical Group, Inc. (“ORLA”) (March 8, 1996.).
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ORLA was to be comprised of five separate anesthesiology practices in Southern California. Each practice was the exclusive or dominant provider of anesthesia services at the local hospital served by the practice. Together, the local hospitals accounted for the lion’s share of all managed care expenditures in Orange County.


ORLA’s sole purpose was to contract with managed care customers for the individual practices’ anesthesia services at the hospitals. ORLA would negotiate a single payment covering all five groups. The managed care customer would pay ORLA for the anesthesia services provided by the group and ORLA would distribute the proceeds to the group that provided services.


ORLA argued that the combination created financial efficiencies for the anesthesia providers. Using a Rule of Reason approach, the Department of Justice defined the relevant service market to be managed anesthesia services and the relevant geographic market to be Orange County, California.


Although ORLA’s members accounted for only 30% of the total anesthesiologists in Orange County, the DOJ drew the relevant market around these five practices and six hospitals. In this market definition, ORLA would reduce the number of group anesthesia competitors able to serve Orange County hospitals from six to two. Therefore, the DOJ concluded that the anticompetitive effects posed by ORLA’s operation outweighed the alleged pro-competitive efficiencies claimed by ORLA."
 
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Going back to what I said, if AMCs are so terrible and if they're scraping the bottom of the barrel for talent, then why don't you start your own group?
Because in this landscape you are operating at a competitive disadvantage as the larger AMCs. Since 40-50% of groups get subsidies. And AMCs can leverage their power over insurers (when physician groups can't). AMCs can make up the difference by forgoing the subsidies by getting more revenue from private insurers.

I know it sounds strange. But right now the "safest" group is the all "MD" group that gets no subsidy. There is really nothing an AMC can offer to the hospital in an all MD group that fully staffs all locations for the hospital.

The other practice models where anesthesia groups are "safe" are those who have more than 60% medicare ratio. It's because AMCs cannot control medicare reimbursement. They will be operating at razer thin margins in that environment as well.
 
Going back to what I said, if AMCs are so terrible and if they're scraping the bottom of the barrel for talent, then why don't you start your own group?

You're either not comprehending or purposely being thick. If someone locks-up a market, you can't compete with them. This is the definition of a monopoly.
 
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Because in this landscape you are operating at a competitive disadvantage as the larger AMCs. Since 40-50% of groups get subsidies. And AMCs can leverage their power over insurers (when physician groups can't). AMCs can make up the difference by forgoing the subsidies by getting more revenue from private insurers.

I know it sounds strange. But right now the "safest" group is the all "MD" group that gets no subsidy. There is really nothing an AMC can offer to the hospital in an all MD group that fully staffs all locations for the hospital.

The other practice models where anesthesia groups are "safe" are those who have more than 60% medicare ratio. It's because AMCs cannot control medicare reimbursement. They will be operating at razer thin margins in that environment as well.


You are right on the first point about NO SUBSIDY means the AMC has a more difficult time stealing the anesthesia contract. But, you are wrong about the second point as the AMC Collects 30% more money from the private payers compared to the old group which results in ZERO subsidy from the hospital.

If the AMC could pay the CEO/hospital a $1 million per year for the lucrative contracts they would kick out the "all MD" model and replace it with the ACT. Currently, that "kickback" of $1 million is illegal but in the future model where ACOs dominate the AMC has a big advantage over "all MD."

I used to think that the ACO meant the death of the AMC but I am no longer certain this is the case. Instead, AMCs can hire cheap labor and run an efficient department to staff the ACO which is something many hospital CEOs don't know how to do.
 
Going back to what I said, if AMCs are so terrible and if they're scraping the bottom of the barrel for talent, then why don't you start your own group?

You make it sound like it's so easy. Hey, let's just start a company and we can be the next AMC, better yet maybe even the Google of Anesthesia.
 
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