USACS share scam.

I find it comical and pathetic when the CMGs try to shovel this BS.

There are basically two types of jobs in our field: ones where you have an equal vote in making the vast majority of group decisions as an actual partner...and every other job (where you’re an employee).

Being in some faux partner position is the worst of both worlds. You’re bound monetarily to the company without any ability to control the shop in which you work. Even better (for the CMG), you may not have a clear path for getting your $ out of the group. Yet, they’ll have more leverage to foist things on you (committees, extra shifts, etc) without pay since you’re a “partner.”

If my job options are fake partner vs employee, than I’ll take the employee gig any day. There’s much less BS and clear boundaries as an employee. You want me to work more? Cool, you’re going to pay me more. You want me to work shifts at a new shop “our” group just took over? Sure, give me a bonus or find somebody else. Why do some people love locums? It’s being an employee on steroids and allows you a measure of control in your life.

Am I the only person who also finds it insulting that these partner-lite shenanigans exist? By offering me that job you’re implying that I’m probably stupid. After all, who on earth would feel a sense of “ownership” for a group that won’t let them: see what they bill, have a say in who they hire, provide oversight over midlevels, discuss how to use PG data, and the list goes on.



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Agreed. The share thing also ties them due to vesting. A totally idiotic move.

FWIW same for loan repayment.

 

Are the smaller CMGs the same like ApolloMD, CEP, etc?

 

At ACEP, USACS used the hashtag #ownershipmatters. The sad thing is most of the EM docs at the conference bought into it. They know most doctors are easy to take for a ride.

24 year olds working at these PE firms are making $400-600/yr and partners are making upwards of $20 million/yr when times are good. All that is value extracted from the hard work we do.

I don't blame them for this. The high cash flow nature of EM staffing lends itself well to the highly levered model of private equity. I do blame the EM docs that sold out the future of their specialty.

 

Fantastic post.

I got recruited hard by these guys when I graduated and they never would really explain the ownership part in terms I could get my head around.

Loving locums right now. Will stay with this for the foreseeable future.

 

Agreed that a lot of the newer docs don't know any better when they graduate residency, but sometimes it's all you have depending on the area you live. In my area, there is only one smaller physician owned group amongst other large corporate companies. And to top it off, they pay substantially less (~$50/hour) initially with 5 year partnership track (if they're even around in 5 years). The old business model needs to change for it to be competitive.

 

#thanksbagnoli

 

I was part of a SDG and had shares in the group. I had about 2% which gave me 2% profit, 2% voting rights. I was able to know all the numbers and able to view our Books. I could sell my shares anytime and knew the value of my shares. When we were bought out/sold, I got 2% of the buyout.

THIS is what Shares truly are. Everything short of this is a different degree of a scam.

Young and ignorant EM docs are preyed on by the CMGs b/c of the lack of knowledge of their value. I am amazed at what some are willing to accept and when I explained to them that they are worth more, they continue to work in these predatory jobs.

 

I think CEP is a large democratic group, not a small CMG. Don't know AppolloMD well.

 

Just curious -- not to get too specific, but could you give an idea of roughly how big a group and in what range the buyout sum was? I'm part of an SDG and always wonder what it would be like if it came to that. Hopefully, if it does, not until my own partnership.

 

The buyouts aren't very big in a true democratic group because it has to be split among all the partners. But in a group with senior partners or one owner, it can be lifechanging money. A typical buyout of good contracts might work out to half a million pre-tax per partner in a true SDG. Or you could just lose the contract and not get squat. But you're not going to get $5M.

In reality, that $500K ($275K after tax) is really just an advance, since you will now be working for less. Within a couple of years, you'll be underwater compared to if you had maintained ownership. Meanwhile, you've hosed all the new grads who would like to work in your area but not work for a CMG.

 

If being in a specific geographic area is very important to you, I would probably recommend not going into EM given the current state of affairs in medicine.

To optimize your career in this field you need to have the mindset of an NFL free agent unless you are lucky enough to find one of these SDG jobs with a reasonable partner track.

 

I agree about the crappiness of a buy out but the numbers are closer to $1m. If you divide by all docs then maybe 750 ish. Much variability though. I know a group that got over 2m per doc another at 1.5m another at 800k and another in the 500k range.

While I oppose the sale they end up no worse than all the numbnuts straight out of residency who work for CMGs. Few of these deals require you to stay.

 

When ema was bought by Emcare they got 265m and had 580 docs.

Envision Healthcare Holdings, Inc. Announces Two EmCare Acquisitions, Initiation of 2015 Guidance and Expanded AMR Operations

 

EVHC M&A - Envision Healthcare Holdings | Seeking Alpha

If you look here they don’t have the ema numbers but they have that they had almost 1k providers. They bought epmg for 120m and they had 500 providers. Assuming similar staffing. So per doc 500k. Atrocious.

Ema on the other hand had less than 50% of those docs as partners. Partners got a little over $1m.

They totally screwed the other docs.

Don’t be a d$ick. Don’t sell to these scum.

 

Maybe in Scottsdale and North Tucson. I haven't ever heard of $2M from a true democratic group. Maybe if there are 5 partners and 20 worker bees. But sure, $500K-$1M a partner. After tax, that's maybe a year or two of income and then no doc will ever own that job again.

 

Lol.. its out there for small niche good groups. When you are in the big SDGs you wont be getting anywhere near that. As I said I oppose the whole practice. IMO if you sell for under $1m, you are probably ******ed or your job sucked from the get go. WCI, I like you have a great job. 500k-750k to end up at “CMG rates” would be a horrible move.

Like I said I know of the groups and the people. If it is possible on one location it is possible in others.

 

Guys, you aren't thinking about this right. It's not just $ per head. Think about the EBIDTA your group generates and what multiple of that EBIDTA the acquiring firm should be paying. EM consolidation is mature and we should command double digit EBIDTA multiples. If your firm is bought or that amount, where is that money going? Probably to the real owners, management etc.

The reality is investment firms know that the docs are required to do the real work that will retain and grow value in the company. They pay you some nominal fee to keep you around. We should do better than this.

 

I don't think any SDG would sell out to a CMG for less than $1mil per partner. But many times there are no choice. If the hospital system gave you a choice of either to sell our or losing the contract, then of course you take the money.

 

Disagree. The reason you won’t get a double digit multiple of EBIDTA is EM physician groups have no fixed assets, and the cash flow is completely dependent upon having the contract, which is hard to predict.

 

Soo, what if a whole bunch of ER docs bought up stocks in envision? could they potentially do a hostile takeover and break up the company and force them to convert into SDGs?


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Of course this is possible. Like any other company. If i could get enough finances, I could buy out envision completely and take it private. I could buy a bunch of stocks and do a hostile take over. But at the end of the day, Just b/c I am an ER doc that owns envision doesn't mean that it is physician owned.

I own stocks in apple but I can tell you its not physician owned. There are hybrids that calls them physician owned but unless its owned by only physicians and open books, then its just another company employing physicians.

 

EM practices are going for double digit EBITDA. That value just isn't trickling down to the docs.

 

I would put in for that. How much are we talking?

 

looks like 200 million shares at 30 bucks a share...

 

Em groups are going for a multiple of 8-12.

A few things. 1) many em groups don’t bill/code as high acuity wise as the cmgs.

When ema was sold the cfo of envision told me that 30% of their charts were undercoded. Think about that. You might think you are getting a multiple of 10 but emcare sees a multiple of 6. That’s before they implement their contracts, their staffing models, and cut other costs.

 

Very interesting insight. You seem to know a good deal about this stuff. How so, if you don't mind? Mind if I PM you?

 

Hmm... I'm down for at least 2 shares. Maybe even 3.

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Pm away.

 

I am currently PGY-3 EM resident searching for jobs. I agree with all he nonsense with this cooperate medical groups madness.

I would love to join a true democratic group.

What advise do you guys have while we search for jobs. It seems like the CMGs are taking over all major areas.

 

Pick an area and limit yourself to what's available or start asking around - your residency, depending on how long it's been around, will have a network of grads spread around who can often help with navigating local markets.

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I can vouch--9 was going-rate I heard

 

Lol, the "annual bonus" isn't a sure thing. This year they didn't cut a check to the rank and file doctors. Apparently they lost their asses in the Summa deal and the rest of us had to pay for it.

 

Exactly how it was when I was there. But Dominic, and the rest of the braintrust at the top still get paid out their salaries, plus any bonuses profits from the Holdings corp (is it still EMP Holdings?). The Holdings corp gets paid out first for billing/coding/HR and other administrative stuff before any pit doc sees $1 of salary.

 

I think you mean cult.

 

What a scam. Shareholder = Paycut + Maybe "Bonus" = Less money. If this is what partnership is, let me be a rate worker.

I am Locums, Schedule myself for 100-130 hrs a month. No weekends, No holidays unless I get extra pay. No metrics, No meetings.

2017 - Half my shifts at hospital based ER + half at Free standing. Good life balance, No hospital admin to worry about, complete control of my schedule. Plus made 125K more than when I was working for a CMG.

 

Emergent, would you mind telling me more? Company? State?

 

A million ain't worth it unless you are close to retirement. Still only 500k after taxes, if that. What, a year and a half in salary?

 

Let’s be h0nest here cause that is not true.

Long term capital gains are 20%. There is another 3.8% if those gains are over 250k. So if you got $1m buyout it is 775K or so. It takes a long time to put that in the bank but if you have a good job it can be done and you can control your business. There are other benefits which help that whole thing as well. Many docs take at least a 100k pay cut.

 

Fair enough. Although it seems most groups get 500k or so per doc.

I still don't understand how this works- doesn't the hospital own the contract, and aren't they only for three years usually? Is it just to get buy-in from the current docs to keep working? At least it's better than when CMGs take over employed docs. Then it's complete crap for the docs who get nothing!

These groups deliver terrible care. I get that rural hospitals just need someone, anyone to staff their EDs, but why would any hospital in a remotely desirable location accept their level of care and physician/provider dissatisfaction?

 

Yeah but many groups have had those contracts for 30+ years. They have the contracts locked up and the CMGs have no in. This is how they get their in. 500k is low. I know of 5 groups who got bought and the partners got from 600k to 3M+ (many non partners).

 

Yes. That makes sense. But the hospital can (and should) just nix it and end the contract the minute it sells. But I guess they just don't, so it works for USACS.

 

The CMGs have a meeting beforehand with the hospitals. They reassure the csuite. Usually group leadership who wishes to sell tells the hospital that things will be the same. Everyone is stoked about this. The new bigger group will offer something super special like new processes to cure whatever was ailing them before.

Then the leadership leaves and often becomes leadership in the CMG, the job loses half the docs and then the hospital is stuck. Meanwhile the old guys leave the young guys who are stuck end up munching on the CMG penis for the rest of their careers.

I mean I know cause I experienced this myself lol. Luckily i found a great opportunity after I cashed my check from the CMG pigs.

 

Yes, I get it, and hospital admin is not known for great intellect, but my point is that you think they would have caught on by now...

 

I have been through this and got a decent but definitely not life changing pay off. They buy the group mainly to maintain stability and this is a requirement from the Hospital.

The hospital just cares about meeting metrics, their bottom line, and stability. If the CMG can improve metrics, or improve the Hospital's bottom line in many ways, then the hospital will get rid of the SDG for the CMG.

The CMG cares about their bottom line and stability.

So what is the best way for the CMG and hospital to maintain stability? Pay off/buy out the SDG and for the $$$, the docs sign a contract for 2+ yrs. This gives them 2 yrs of stability, nothing changes, the docs are generally happy, the hospital is happy, the CMG makes money, the specialists are happy too.

This gives them 2 yrs to replace any docs that leaves and a good amount will leave for greener pastures once their contract ends.

If not for Stability, SDGs would never be bought out b/c they own absolutely Nothing. CMGs are smart.

They know its easier to buy the SDG than try to replace 100+ docs with Locums that would cost twice as much flying them in. Look at Summa. It would have been much easier to just buy them out rather than the huge political and monetary cost.

 

Your scenario is more of a takeover. My SDG voluntarily sold and we went out and sought a payout. The CMG had no “in” to our hospital as we did what smart SDGs do. Become integral to the hospital and be on a first name basis with everyone in the C suite. Be on the board of directors, leaders of the med staff etc.

If you are a SDG and you aren’t doing this then you are a fool.

Your

 

Don't Kid yourself.

Our group was 100+ docs, over 20 yrs with the same system, integrated, multiple Chief of staff, multiple committee chairs, top rated specialists group in the hospital rated by our peers, bent over backwards with all metrics, etc.

When it came down to the $$$, our choice was to sell out to the highest CMG bidder which we did. Otherwise, we would fight it and create animosity with the C suite with the never ending cloud of being terminated any time.

If a SDG feels so solid, there is no reason to sell out IMO.

 

Yeah. I also think 100 docs gets tough to manage. If the C suite tells you that you are at risk then sure sell. Why the hell not.

If you feel good about your spot keep working, and keep the profits for yourself and more importantly look at your business and say to yourself. How can we be more profitable. There is often room.

 

Don't go into medicine.

If it's too late for that, don't go into emergency medicine.

If it's too late for that, live like a homeless guy with a cardboard sign, save a ton, and retire early in Costa Rica.

 

Yeah it's really a tough life working 11 shifts / month, making 375k, having almost total control over my schedule, and going on 3 nice vacations a year.