D
deleted131481
Hi all,
I am a CA-1 considering job prospects, and the region I want to work in has majority market share by AMCs with some private groups. I will work at an AMC if it comes down to it, but it's certainly not my ideal choice.
I have a fairly limited understanding of private practice anesthesia, but my question is: can a private physician group outbid an AMC? And if so, how come I've never heard of it?
To my understanding, most AMCs have formed by buying out current private practices, usually physician-owned. Less commonly heard (correct me if I'm wrong), is an AMC outbidding a current incumbent group. These AMCs are corporation or private equity funds or whatever, so I imagine they are making a nice margin on all their employees. I don't know what number that is, but let's say 30%. Doesn't that give a significant margin that another group could outbid them?
Let's say Hospital A has anesthesia services through an AMC. The AMC makes 30% margin off the physician services in the practice. What's to stop an outside physician group from underbidding the incumbent AMC by 15%? Seems like that group would benefit from owning their own group, and have higher average salary than as an AMC employee.
I could see significant barriers including:
- Timing. Hospital contracts are not renewed every year, maybe more like every 5 years?
- Having available group/physicians. To take on a contract, obviously you need available physicians, and finding 10-20 anesthesiologists to bring in at once is no easy task. One choice is new grads, but I imagine a hospital would not be thrilled hiring a bunch of anesthesiologists straight out of residency. My idea (?fantasy) would be to partner with a local physician only group that would be willing to take on a bunch of new grads in expanding to a another hospital. This would give the hospital the comfort of an established group running the practice.
- Legal/business expertise. I'm sure the AMC has the lawyers, business connections, etc. which no independent group could hope to match.
I am curious to see what others think, and how far off my perceptions might be. It seems to me an above situation would have significant hurdles, but if they could be overcome everyone would benefit except the AMC.
I am a CA-1 considering job prospects, and the region I want to work in has majority market share by AMCs with some private groups. I will work at an AMC if it comes down to it, but it's certainly not my ideal choice.
I have a fairly limited understanding of private practice anesthesia, but my question is: can a private physician group outbid an AMC? And if so, how come I've never heard of it?
To my understanding, most AMCs have formed by buying out current private practices, usually physician-owned. Less commonly heard (correct me if I'm wrong), is an AMC outbidding a current incumbent group. These AMCs are corporation or private equity funds or whatever, so I imagine they are making a nice margin on all their employees. I don't know what number that is, but let's say 30%. Doesn't that give a significant margin that another group could outbid them?
Let's say Hospital A has anesthesia services through an AMC. The AMC makes 30% margin off the physician services in the practice. What's to stop an outside physician group from underbidding the incumbent AMC by 15%? Seems like that group would benefit from owning their own group, and have higher average salary than as an AMC employee.
I could see significant barriers including:
- Timing. Hospital contracts are not renewed every year, maybe more like every 5 years?
- Having available group/physicians. To take on a contract, obviously you need available physicians, and finding 10-20 anesthesiologists to bring in at once is no easy task. One choice is new grads, but I imagine a hospital would not be thrilled hiring a bunch of anesthesiologists straight out of residency. My idea (?fantasy) would be to partner with a local physician only group that would be willing to take on a bunch of new grads in expanding to a another hospital. This would give the hospital the comfort of an established group running the practice.
- Legal/business expertise. I'm sure the AMC has the lawyers, business connections, etc. which no independent group could hope to match.
I am curious to see what others think, and how far off my perceptions might be. It seems to me an above situation would have significant hurdles, but if they could be overcome everyone would benefit except the AMC.