I'm Troy Tippett. I'm president of the Neurosurgery Research and Education Foundation. I really appreciate you coming to this inaugural event. This is a free seminar in which the NREF is putting on in order to try to increase value to you as a neurosurgeon from the NREF, and I'm going to talk just for a minute about NREF. I want you to all take a look at the little brochure on your table here, and I wish you would take it home, and I also wish you would all sign up to become Cushing-level members in NREF. We need your help. Just so some of you probably are familiar with NREF, and many people think this is all we do at NREF. Since 1980, we've done really a lot of great things. 116 or so research grants, young clinician grants. That's a young clinician two years or so after they're out in practice, up to that time, to try to advance them money to get started on research so that they can go ahead and try to advance to an NIH grant. That's the whole purpose of these clinical grants, which we've been giving since 1983, really. The NREF was founded in 1980, but we didn't have enough money to give any until 83, and now we're doing post-clinical fellowships, and we're also doing medical student summer research projects. So that's kind of the traditional things I think most of you associate NREF with, but I want to tell you the new NREF, which was found last year as a separate C3 organization under the AANS, we're trying to increase and bring more value to all neurosurgeons beyond those traditional things. That doesn't mean we're not going to continue to do the traditional things, but this is some of the things we've been doing this year. We've kind of had a relationship. Does everybody here know what the NeuroPoint Alliance is? Anybody know what that is? Well, that's something that the AANS has founded to do outcome study. They're doing N2QOD, which is a spine surgery outcome study. Anybody here participating in the N2QOD project? There's about 50 centers around the country right now that are doing outcome study on such things as spinal fusion and disc surgery to try to help you know who to best operate on and then try to increase our value to the payers basically to try to show them that what we're really doing is worthwhile. So this is a huge thing. Now some of the other things that we have done this year, we're working in conjunction with our industry partners to form a stereotactic radiosurgery outcome study, too, and that's just about to be undertaken with the cooperation of Brain Lab and Variant, hopefully, and also Electa. So those companies are helping us do these, again, an outcome study to try to prove the use for stereotactic research or radiosurgery. Now in this last year, our NREF board has also evaluated a traumatic brain injury grant. We decided not to fund that right now, but we did just approve just this week an analysis of this data I was just talking to you about for spinal research for outcomes of spinal surgery. So within the next year, thanks to funding from NREF, there's going to be about five or six papers that looks at this analysis of this, now the best data that there's ever been with about 80 percent follow-up on these spinal surgery patients. It's going to be huge, and that's coming from your money that you've given to NREF to help us do things which will help your practice. So that's the whole idea. There's a whole plethora of things that we're doing now, but I just wanted to give you a feel that we're doing more than the traditional things, but in order to do that, of course, we have to have more money. And I can also tell you that money from industry is going away. It is exceedingly difficult. Now I'll just give you one small example. About three years ago, we got $1.2 million from industry to do various research projects and so on. This year, it's a real struggle to get about $500,000. I mean, literally, it's going away. So we have to do things differently. We need your help. I think this is something that is great for all of you. This is the mission statement now of the new NREF. We need to fund research and education. Now this part today comes under the educational aspect, and we have one of our objectives is to develop a comprehensive portfolio of programs that will help attract member and corporate support. And that, again, is part of this issue today. And today, of course, as you know, we're going to talk about hospital employment. But finally, before I get into that, again, I'd like to ask you all to consider becoming a Cushing level member of NREF. And you can do that by merely signing a pledge that you'll give $2,500 a year for 10 years. And that's tax deductible. So we're talking probably for most of you, that's about half of that year. You can have your cell phone for like, your cell phone costs a lot more than that does for you to do something that would really help neurosurgery. So I ask you to go to the www.nref.org and sign up for a pledge to NREF. We need your help in order to try to continue to do things. So we're today going to explore hospital employment. And we're not putting this course on to tell you that you need to become a hospital employee. We're putting this course on to try to expand your knowledge base so that you can make a judgment on your own in these times in which there are reputed to be increasing number of neurosurgeons who are becoming hospital employees. So we have a great panel. We have two physicians who are hospital employees now. Jim Bean and Alex Vlodka are going to talk. We have a healthcare attorney who has great experience in this. And we have a recruiter who I think recruited half the people in the room here. I think some of you actually have worked with Andrea. So I think it's going to be a really good talk. They're each going to cover that. And at the end, when Jim Bean talks, we will open it up during that time frame for your comments or questions. We want to hear from you as well. So we will get started. Andrea Winslow is from Cleveland. She works as a neurosurgery recruitment specialist. She's had over 15 years of service in this industry. She specializes in neurosurgery recruitment and does this through Rosman Research in Cleveland. And she's authored a number of articles in this regard. And I can see in the room here, there's a number of her success stories out here with us today. So Andrea, could you get us started with this today, please? Thanks. I appreciate that kind introduction, Dr. Tippett. It's certainly a pleasure to see all of you and an honor to be on this panel for sure. I'm here to talk to you as a recruiter and from a consultant's perspective on hospital employment. Rosman Search has been around for about nine years. We've certainly assisted several hospitals and many neurosurgeons with respect to the employment decisions. For the purposes of this talk, I actually, even though we have that experience, I decided to take the time over the last couple of months to interview several of you, actually. One of those interviewees is in our audience today. But I interviewed those that went from hospital employment to private practice and vice versa. Those that are entering PSA agreements, that's solo private practitioner in small town USA. Those that are part of groups and academic chairman. So what I'm here to do today is to talk to you about their experiences. And I'm a walker, so I prefer this. Thank you. Do we have a clicker? I would need the clicker in order to move, right? Yeah. So sorry about that. So nevertheless, what I decided to do is interview these, all of these neurosurgeons. And what I want to share, what I wanted to share with you is the experiences that they had. So we're going to talk about the good experiences that they've had, the bad experiences, and most importantly, what to do about it, right? We're going to focus on five main topics today as it relates to hospital employment. The four C's as I call them, compensation, control over your practice, call, contracts, and what I think is probably most important is knowing yourself. What would you need to be successful in an employed model? So we'll focus on compensation first and we'll focus about the good things about becoming employed as I heard from the neurosurgeons that I interviewed. And first of all, you make more money. That was their experience. This particular practice saw a 20% increase in what they were making when they were in private practice. And they had that increase due to becoming insurance blind, right? So they joined a hospital under an RVU-based bonus model when they were serving their community as a private practitioners or that group. They still saw all of those uninsured or underinsured patients and they still saw them when they became employed, but they actually started to get paid for them. So that was a positive. The next big positive that I heard from them was that they enjoyed the stability of hospital employment. So they like the fact that that base salary is there. I don't know if I know an employed model where there isn't a base salary at least. Usually some sort of bonus plan on top of that. So if there are changes with respect to the medical economic conditions of the country, if the hospital across the street decides to hire three or four neurosurgeons and compete against you, they felt a level of comfort that there was the stability of having at least that base salary. No overhead pressure. They certainly enjoyed that. They didn't have to worry about covering the salary of the PA and the office manager and the receptionist and all of those things. So let's talk about the negatives that I heard, the downside that they experienced as a result of becoming employed. And that's the loss of control over billing and coding. If your billers and coders aren't doing their job effectively, you're not going to be receiving what you earned, right? And this particular person did about 400 cases. And administration said, well, that equates to about 5,000 WRVUs. He said that's a huge discrepancy and frankly couldn't do anything about it. No transparency about productivity. This neurosurgeon wanted to know what does my productivity look like? May I have quarterly or monthly reports? And he was left in the dark, basically. Similarly, there's no transparency about expenses for some of the neurosurgeons that I spoke with, particularly if you're on a collections minus expenses model and you don't know what those expenses are. They're just allocating them to you. And there was no way to change that for that particular neurosurgeon. So what do we do about it? First and foremost, I think that you should be on an RVU-based bonus plan, not a collections-based plan, so that you can be insurance blind. Ask both the administration and the employed surgeons whether there have been problems with coding and billing. So ask both the administration and the other employed surgeons whether there have been problems with coding or calculating billing. It might sound kind of nutty to ask administration, hey, have there been any problems? You think they're going to say yes? They may. You don't know if you don't ask. They could be eager to say, as a matter of fact, we had issues six months ago and we fixed what we needed to fix and now we're okay. Ask the other surgeons if they've had any issues with billing or coding in other departments. Put it in your contract that you want monthly or quarterly productivity statements so that you can keep track of your own productivity. And perhaps most importantly, I think, keep track of your own cases. I can't impress upon that on you enough. I really think that you should keep a log of your own cases. If you don't do that, you won't know how to bill. You should know how to code them. If you don't know how to code them, you should be willing to hire an independent coder so that you know that what you are making, you're actually receiving. And then ask if the neurosurgeons can control the billing and the coding themselves. That first practice that I mentioned in the beginning, that saw a 20% increase in their product, in their compensation, that's not how it started. They were in practice for 25 years, had always managed their own billing and coding, became employed, and saw that money was being left on the table. So the senior neurosurgeon went to the administration and said, listen, you're leaving money on the table for me, but the health system is also losing out. The administrator was really receptive to that conversation. And so they let that group maintain control of the billing and the coding department. So let's talk about controlling that practice, the loss of control, really, is what we're talking about. And believe it or not, there are some positives to losing control. We alluded to this earlier. There's no need to run a business. You don't have to worry about the headaches of your overhead, the malpractice insurance, negotiating insurance contracts, all of those sorts of things, staffing, hiring and firing, all of that goes away. And some of the neurosurgeons said they've had very good experiences and they enjoy focusing only on patient care. Referral generation for some of them was streamlined. It was actually easier. These guys were in private practice, admitting in three or four hospitals, going to the outlying clinics, continuing to shake hands and try to get as many referrals as they can. It was more difficult when they were in private practice. This particular neurosurgeon joined an eight hospital health system, and all of the referrals were streamlined straight to him. Recruitment is often easier. I have a group in Oregon, a group of four. One of them is retiring. They were in private practice. They didn't know how they were going to cover the salary for the for the guy coming over. They definitely didn't know how they were going to cover the startup costs associated with bringing a new neurosurgeon into the group. They became employed and succession planning became much easier. The hospital assumed all of those costs. Capital needs can also be more easily met, right? This particular person had direct involvement in developing the new ORs, met with the architect, got to choose all of the tools and equipment, had all of the bells and whistles he could want. He's happy as a clam. So the downsides that I heard from the neurosurgeons I interviewed. Lack of autonomy and staffing decisions. You know, if you have a PA that's incompetent and you need to get rid of that person, if you're in private practice, you get rid of them. That's your decision to make. In hospital employment, it's not always that easy. This particular neurosurgeon fell after going to administration several times and getting nowhere. He rounded on every single day. He saw every consult. He felt he had to do that. This is the same neurosurgeon actually in the next quote where he had three practice administrators in 18 months. And they worked part time. They were being delegated to manage other practices on top of the neurosurgery service and there was nothing that he could do about it. So on the opposite side of the spectrum from the one who had the capital needs met without any issues, this guy had no control over instrumentation and equipment. He had to use who was on the preferred vendor list. And if the hospital didn't have them on their list, then he couldn't use the equipment that he felt he needed. The most egregious story that I heard as I'm interviewing all of these neurosurgeons is that one of the VP of physician services with no medical background told one of the neurosurgeons how to triage patients. Didn't know their issues, their level of acuity, but he knew when those patients needed to be seen. So what do we do about it? Make sure you understand your reporting structure. That's something I also cannot say enough. Make sure you understand your reporting structure. Who is the person identified to address your concerns when you have a problem? Who's responsible for ensuring the success of your service line? If you don't have somebody that you are reporting to, and you don't have anybody identified to address your concerns, you're going to be running around the hospital looking for that sympathetic ear and still not getting anything done. So please identify your reporting structure. Ensure that you have the power to weigh in on hiring decisions. The most successful practices that I've seen join hospitals have ultimate veto power. They get to make the final decisions on whom they hire and they fire. That relates to their practice, right? So make sure that you at least have the power to weigh in on those decisions. Try to decide ahead of time what tools and equipment that you need. I have one neurosurgeon that joined a program with the verbal commitment from the hospital that they would provide a biplanar and angio suite. Endovascular trained guy. They said, listen, the capital expenditure has been approved. The space has been carved out. Eighteen months later, he still had no biplanar and he left. Make sure or try at the very least. Or vendors. Perhaps you like particular firms or companies to order from. Put those into your contract. Please, please, please listen to your intuition. If there's that little voice in the back of your head that says something doesn't sound right, please don't ignore that. When I ask people, okay, so it didn't sound right to me, but I went ahead anyway, I'd say why. And he'd say, well, I wanted to practice with my friend. Or, you know, they had the lion's share of the market in the area. Or the hospital was really strong financially. Please don't ignore that. Please don't ignore that little voice. Look at other employed departments and administration's ability to run those service lines. Talk to those other service lines. When you've had a problem in the past, what did administration do about it? How did they address your concerns? If they're not supportive of other service lines, chances are they're not going to be supportive of yours. Finally, this is a tough one. Recognize the loss of control is usually a part of employment. And figure out whether you can work collaboratively and whether you trust the people that you're entering this arrangement into. So let's talk about call for a second. The good things about joining a group, a hospital employed group, with respect to call. Their experience has been that they will usually solve your problem with respect to call. If you need to come to the AANS, or you're vacationing to Costa Rica, it doesn't matter. If you're not going to be there, how are they going to backfill your spot? And they said, listen, when I was in private practice, they didn't have a vest and interest to make sure I was covered. Now I'm a part of the hospital system, the family, as they call it. Some of them did. And it became much easier to get coverage when they needed it. Travel to different hospitals may be reduced. If you were in private practice and going to two or three, four hospitals, and now you perhaps could just go to one hospital. So that's certainly a plus. The downside to joining a hospital that I heard over and over again with respect to call is that you lose your leverage. So if you've got your call pay contract is up for renewal and it's not favorable, you can't say, well, then forget. And I'm not going to take call at your hospital. You're employed now. You have to take call at that hospital or no longer be employed usually. And then on the opposite side of these experiences, it was the hospital's more eager to help me now that I'm employed. This guy's saying, gosh, I was just a number. They owned me now. So they felt like if there was no, I wasn't in private practice, they basically said, we're not interested to help you. Put it in your contract. That's the answer to call, in my opinion. Identify how many days are going to be required, what the call pay expectations are, what happens if someone leaves on the schedule, when is locum's coverage appropriate. Ensure that you list all of that information in your contract. And we'll talk about that, the contract here. So the good things about having a contract. There are some good things. You can identify your priorities and figure out how they'll be handled. So if you know what your priorities are, if you are interested to, I just placed a neurosurgeon in Virginia, he's a pediatric neurosurgeon. He goes on mission trips twice a year. And he wants to bring the kids back to operate on. He can't, if he didn't have that in his contract and said four months later, by the way, I'm going to St. Vincent and I'm going to bring the kids back, how well do you think that would be received? Figure out what your priorities are and put them in your contract. Understand that a contract is evidence of your agreement. So those that had a favorable experience becoming employed and being employed said, when there was a problem, I knew I could go back to the contract and figure out what we decided upon and that it would be upheld. So the downside, or really the opposite of all that, right, that it's about experiences. This particular neurosurgeon went into an area where there was no neurosurgery service, said I'm going to grow it. I know there's some risk associated with that. I will take a low-based salary with a high RVU threshold and show them they could really, he could really grow the service line. When the contract was up in three years, hospital administration said, you've done a fantastic job. You've exceeded our expectations. Thank you very much. You're making too much money. We have to renegotiate your contract. He wound up doing that in order to stay. You may assume that your contractual benefits may change as you succeed, but they may not. This particular neurosurgeon relocated halfway across the country, started out brand new, right, having to start from scratch and building his referrals. They allocated six hours of block OR time to him in his contract. He figured, I would, you know, that's fine. I can deal with that. As I get busier, I'm sure they'll provide me more block OR time. Doesn't that make sense? They didn't. And of course, the people in charge may change, right? So if you, if your CEO leaves, if you are bought up by another health system, you may have to go to another health system. You may have to renegotiate your contract and it could be less favorable. So what do we do about that? What do we need to know about contracts? Understand what a contract is and what it isn't. It is evidence of an agreement. It doesn't force anybody to uphold anything. It is only evidence of the agreement. And what do you do when the contract terms aren't being met? Do you find the biggest, baddest, meanest pit bull lawyer and go after them? What does that do for your relationship with the hospital? Do you wish to remain employed there? These are things that I would encourage you to think about. We've already talked about this. Specify your reporting structure. Make sure that you know who to report to and who's identified to assist you when you have problems. You don't have to put everything into the contract, but you should put all of your priorities into the contract, which brings us to knowing yourself. What are your priorities? It's a little bit of introspection, I think. Are you going to be successful in a hospital-employed model if you've been in private practice calling the shots for years and years? Or if you know yourself and you know that you prefer to make those decisions on your own, are you going to be able to work collaboratively with hospital administration? Fundamentally, what do you need to be happy in your job? So some final takeaway points, if you don't remember anything or haven't heard a thing that I've said, please remember these five things. Keep your own records of your cases. Make sure that you know how to code them, and if you don't, find someone who can, an independent coder. Control the hiring and firing. Put that in your contract. And if you can't, make sure that you can accept that or that you're willing to work and that you trust the people that you're entering an agreement into. I almost didn't put this in my slide presentation, but I think you should protect your time because I don't know that neurosurgeons are wired to do that, frankly. But I think you should try. You know, I have a neurosurgeon I'm working with right now in Massachusetts who relocated six months later. She worked out the call piece in her contract. I'm going to take 10 days of call. This is how much I'm going to be paid if you make me take more. This is what's going. She had it very laid out. But then she gets to the actual community and she says, I'm going to go like gangbusters. I'm going to prove that I'm going to be worth it. The community's going to love me. The hospital administration's going to say I'm going to do a great job. Four months later, she's burnt out. And what she decided to do became the new expectation. And then she resented hospital administration for it. Please protect your time. Know what a contract is and what it isn't. A contract is only as good as the two people behind it, right? And finally, know how to deal with the trade-offs. Do a little introspection and see if that's something you can do. Thank you very much for your time. I know that I need all this. I don't even, oh, I guess it does work. Thanks very much, Andrea. Now you're going to hear from Alex Vlodka, who is currently the treasurer of the AANS. But more importantly, at least in this audience, he has worked in academic practice. He trained at the Medical College of Virginia and then went back to Texas where he spent some time at Baylor and then in UT, also in Houston. And most recently, he's gone to work as an employed physician since 2009 in Austin, Texas. Alex has a lot of socioeconomic experience. He was head of your Washington Committee for Neurosurgery, has spent a lot of time working hard for you over the years, and as I say, continues to do so in neurosurgery. He's had a great deal of experience with neurotrauma. He's been head of the neurotrauma section of AANS and also represented us with the College of Surgeons, head of their committee on trauma. So he has had a wide variety of experiences, but today he's going to talk to us all about his experience as an employed physician. Alex? Great, thank you, Troy. Well, I don't have anything to add to what Andrea had to say, really. She hit a lot of my talking points and probably did it better than I could, but hopefully if you all hear it twice, it may sink in a little bit better. And thinking about how to do this or how to structure this talk, I don't know if any of you have ever read articles in a Harvard business review, but the way a lot of them are structured is that something happens. They talk about some corporate strategy or a hiring or a merger or something that either worked well or didn't work well, and then they do this retrospective analysis and they say in hindsight, it was obvious why this wouldn't happen. It was kind of like saying it was obvious that you kind of got stuck, you were going to win last night. You know, well, if they're so smart, they should have put money on the games ahead of time. So I'll kind of talk a little bit anecdotally about my experience and get into a lot of the same topics Andrea covered about either what I've learned or what some of my colleagues who are in a similar situation have also told me. So as Troy said, after residency, my first job was at Baylor College of Medicine. There's a couple of famous Houstonians there, Michael DeBakey and Bush 41. And I actually had spent most of my attending career there. And things were going well, as Troy said. You know, we did a lot of research. My first love is monitoring TBI patients and physiology. So it's amazing when you step back, look at all the stuff we hooked people up to. And that was going well. You know, I'd probably still be a, you know, professor of neurosurgery doing research, if not for the breakup here between two of the anchoring institutions in the Texas Medical Center. You know, the Methodist Hospital and Baylor College of Medicine. DeBakey sort of brought the two of them together more than half a century ago. And about a decade ago or a bit more, Baylor got a new president. You know, their dean, they called the president. Most dangerous thing in the world is an MB with an MBA. And he thought that he could get more value for the Baylor name and tried to squeeze more money out of the hospital partner. And the hospital was willing to meet him most of the way, but not all. And led to a very messy divorce, unfortunately. And eventually I started looking around and what do you do in academics when you sort of want to move on? You try to move up, right? So I was actually offered a couple of chairmanships of med school and their surgery departments. And I always like to joke with people that one of the med schools, the Parent University, had recently won the NCAA football championship. Another one, they'd won the basketball championship. So, you know, could have had great college sports if I'd gone to these places. But didn't really think I could build very much. And you looked at the city and the community and the hospital, didn't really seem very exciting. As Andrew would say, my intuition was telling me this wasn't gonna work very well. So I didn't go there. But meanwhile, my wife's best friend lived here in Austin, Texas. And she said, go to Austin. I said, you know, a guy like me, I need a med school. There's nothing going on there. But this literally started as a cold call. And one thing led to another and found out there's a lot going on there. There is gonna be a medical school now. The Dell Medical School is already building infrastructure. First students will start in about two and a half years. And coincidentally, the first dean was named a couple of months ago. He's actually a stroke neurologist here at UCSF. So there's a nice little connection there. So as I said, the problem is that there was no med school. So I wound up being employed by this hospital system. And if you look at some, this article was just published less than a month ago in Medscape Medical News, a survey of 4,600 physicians. Why do doctors become employed? What are the reasons? And again, Andrea touched on a lot of these. Most of them want the financial security. And we all know what the finances are like nowadays. Decreasing reimbursements, more and more hassle. It's getting harder and harder to make a go of it in your traditional private practice. You're depending more and more on your ancillaries. A little less than a third, less paperwork. Again, it seems like every year there's more and more stuff you have to do. You spend less time seeing patients and more time filling out forms. Or nowadays, more and more time staring at the computer screen, filling out stuff on the EMR, not dealing with the patient. And 20% better work-life balance. Are people happier when they become employed? And again, that same survey said if you look at the actual work environment, both employed or non-employed guys are generally pretty happy, about three quarters of them. And the current, their practice situation, again, about equal, maybe a little bit more happiness among the self-employed group. And one thing that seems to be, whoops, one thing that seems to be popular is that hospital employment seems to be a more acceptable solution for people. But at the extremes of their career. So a lot of older docs have just said, you know, forget it, I've had enough. I just wanna hang on for a few more years. I've had enough of the hassle, let's just go with this. The young guys have never, ever thought about being on their own. Their whole goal all through med school and training really was become part of a larger organization. The people in the middle who've been out maybe 10 or 20, 25 years, they seem to have a harder time adapting for a lot of the reasons Andrea mentioned and ones that I'm gonna hit on also. Now this is a great question. Are you happier after you move? Move either from self-employment to hospital employment or vice versa. So you go from self-employed to hospital employed, about half of them are happier now and a quarter are less happy now. If you were hospital employed, go out on your own, 70% are happier on your own, only 9% are less happy. So I don't quite know what to make of those statistics. All I can think of is that perhaps people did their homework. You know, as Andrea said, they thought about it and when they made a move, it tended to work out for the better for them. And Andrea talked a lot about this autonomy, which just my verbal conversations with a lot of doctors, that's the biggest complaint people have. And in that study I've mentioned, about 27% of them said that was their biggest complaint, loss of autonomy. Somewhat similar type of problem, more than a third said that they felt they didn't have any input into major decisions, whether it's capital equipment purchases for the OR, whether it's launching new initiatives, whatever, a stroke center, a spine center, whether you want to become a blue center of distinction in spine or something like that, they were just told to do this. They didn't really have much input into it. Almost half, 44%, you're treated like an employee, not a partner, right? Before, if you're on your own, you're in private practice, the hospital needs to treat you well so you keep bringing your cases there. And there is this kind of partnership or working relationship, but not anymore. Not if you're employed, not if they own you. And a third biggest complaint is lack of control over the work schedule. And again, Andrew laid it out very nicely in her slides, when you hear about the bad side of these things. Some of the docs were just basically told, this is what you're doing. You don't have any input or any control over this anymore. Now this is something that really has made the biggest impression on me, is the asymmetry of knowledge between what we all know is neurosurgeons and clinicians versus what the administrators know. So they have very little clinical background. I mean, what do they spend their days talking about? They talk about occupancy rates, reimbursement rates, square footage, FTEs, payer mix, and things like that. They don't get into the minutiae of why is this patient febrile with a mild bump in the white count, or what's this funny thing on the chest x-ray? And it's also kind of amazing that I don't know how you get along with your administrators, but so many times you get these calls and they say, I got a runny nose, can you give me some antibiotics? And we all know, of course, that's the worst thing to do, right? You don't give antibiotics at a viral infection. Or they call and say, you know, I was lifting a lot of boxes yesterday, my back hurts, I need an MRI scan. And of course, we know that's one of the biggest drivers of wasteful spending in healthcare is unnecessary MRIs. They don't get it, you know? Now think about also your schooling. And I think we take this for granted. Ever since college or med school, you've learned about anatomy, biochemistry, physiology. Then you get to med school, you learn how the normal stuff gets screwed up in disease. Then you learn how that presents in different patients and how sometimes a guy with back pain really needs an operation, other times he doesn't. You know, some headaches are important, some aren't. And then you actually start cutting people open and learning what works and what doesn't work. And every day we add to that body of knowledge. That's pretty sophisticated stuff. Administrators can't pick that up. But all the phrases I just tossed around, you know, margin and payer mix and reimbursement rates, we all kind of know what that means. You know, it's just we don't spend all day doing it. We're very specialized though, that's the problem. We're kind of anchored. And if you want to get a different career, you're probably gonna do something along your medical education, administration, research. The administrators can pack up and go anywhere. You know, they can work for a hospital one year, they can go work for some manufacturing company or a software company or a non-profit or something like that, because the skills they have are pretty generic. They're not specialized like ours. So it is pretty interesting when you kind of get inside their skin and think about how they view the world. That may often lead to some of the basic disagreements and misunderstandings I think we have. Now here's the other problem. Really, it's all about the money for them, right? The guy to fill up their beds, their clinics, and especially patients with good insurance. So let's just take this out and play this hypothetically. Let's say that 5% of the time, I do maybe not quite as good a job as I could have done in the OR. You know, not that anybody was paralyzed or died on a table, but you know, maybe I didn't decompress that lumbar stenosis well enough. Maybe I didn't take out quite as much of that glioblastoma. Maybe my pedicle screw was off a little bit. But I may be a busy guy. I may bring in 500 cases a year. So 5% of 500 cases, that's 25 patients. Now let's say Dr. Bean or Dr. Tippett are at the same hospital, and they're really good. They've been doing this for a while. Maybe their rate of screw-ups is only 1% or 2%. They're not quite as busy as I am. You know, they only do 300 cases a year, but maybe five or six of those patients have something they could have done better. But who's gonna be more popular at the hospital? Probably me, because I'm bringing in a lot more cases. But who's the guy you'd want to send your family member to? Probably Dr. Bean or Dr. Tippett, you know? So it's a funny little distinction. When you get into such subtle nuances, as long as the beds are getting filled, that's okay. And you know, unfortunately, what you read about in the popular press are some of these neurosurgeons who are just butchers. I mean, really, patients dying on a table, waking up paralyzed. And the common theme is, how did this guy go for so long? You know, why was he allowed to practice so many different hospitals before someone blew the whistle? A lot of times, there just wasn't that much incentive to dig deeper because the beds were filled. So it's a very different mindset. And this is an interesting comment. If you're gonna go work somewhere, are you gonna go work for kind of a mature, established system, like in this part of the country, a Kaiser, or a Virginia Mason, or Intermountain Health, or Mayo, or a Cleveland Clinic, or Geisinger, where they sort of know what's going on, and it's pretty clear where you're gonna fit in, what your responsibilities are? Or are you going someplace that's kind of brand new and just hiring docs for the first time, and it's like a Wild West show? Well, there are pros and cons either way. And if you go somewhere that's starting up, you know, the business guys talk about first mover advantage, where you might be able to go in your initial contract, get a pretty good salary because the hospital doesn't have much experience employing docs. But the problem is that changes quite a bit. And after your initial term, your contract, then they often ratchet salary down quite a bit. And if you were smart with your money initially, that's great. But if you got addicted to buying a brand new Ferrari every year, then suddenly reality hits. It often causes a lot of problems with the doctors. The other thing, and again, this gets back to a lot of what Andrea was talking about with her contracts. Be very attentive to what you're getting paid to do. And if you want to just do clinical work, and that's all you want, but then they start tasking you with stuff like supervising a quality program or launching community outreach initiatives, you might want to get paid for that. Because otherwise you're losing money every time you do that stuff instead of operating. And the flip side is true also. If you actually have some interest in nursing education or quality initiatives, you better have some compensation for that built into your contract because if not otherwise, again, you're losing money. Another thing, too, to keep in mind, and again, this gets back to what you heard earlier, you're not all incentives are financial. What tradeoffs are you willing to make? Years ago, I was talking to a recruiter who was telling me that they were looking to fill a couple of neurosurgical positions. One was in San Diego. One was in North Dakota. The San Diego position was paying rock bottom, below market rate salary. And the position in North Dakota was paying a ton of money. And she said, we'll fill a San Diego spot. People will take less money to live in that community. But she knew they wouldn't fill a North Dakota spot. So you're willing to give up some salary to live in a nice place or live in a place that may not be quite so good but make extra money. There are a lot of other incentives, too. Be closer to family, the opportunity to participate in research trials or education, if that's the kind of stuff that you enjoy doing. So a couple of slides now on how our compensation was structured. And again, initially, the hospital was buying up a lot of compensation groups, hiring people without much of a plan. And everyone was on a guaranteed contract for a few years. But then as people started coming off those, it got a little bit dicey. But basically, COMP is primarily work-RVU based. What's interesting, too, is if you work with orthospine guys, keep in mind that per work-RVU, neurosurgeons make more than orthospine guys. So the orthospine guy and I can do the exact same case, but I get paid more for it. And that causes some friction if people aren't ready for that. You're going to see this come up all the time. Fair market value. And depending upon the leadership of your hospital or what part of the country you're in, the household may be very, very skittish about paying you too much money. So they'll get external consultants who come up with some formulas. Sometimes they're pretty straightforward. Sometimes it's amazing how complicated these COMP formulas are. The reason they want to do that, of course, is to cover their own butts. So the whole thing about hospital employment and COMP is that they don't want to be accused of stark violations or IRS violations or anti-kickback violations. So they've got to make sure that if I'm getting paid $2 million a year, I've earned all that and it's justified. They're not paying me just because I show up for work once a week. What we also tried to do, though, in anticipation of this whole transition from a fee-for-service to a fee-for-value type of program, is start getting people thinking about at least some of their COMP being non-clinical. So what we have in our place, we have neurosurgery, neurology, rehab, orthospine. But we're trying to build programs across those disciplines. So, for example, an oncology program can involve all those things. An epilepsy program hits a lot of those columns. Stroke program. Some docs who are actually leading those programs means spearheading, putting together protocols and order sets and quality metrics and things like that. Figure out how many hours per week they get paid for that. And in terms of paying them for dollar per hour, this is really interesting. So think about this. Let's just say hypothetically they're getting paid $1,000 for that. Well, what you want to do then is minimize the number of hours you work. See, I'm getting paid $1,000 for 40 hours a week. That's $25 an hour. Yeah, $25 an hour. But if I say, oh, I work so hard. You know, I work 80 hours a week. That's only $12.50 an hour, right? So you've got to be careful because in this case you want to minimize the number of hours per week you work. But as Andrea said, sometimes a hospital can come back to bite you if they think you're not working hard enough or getting paid too much. So it's an interesting little catch-22 you can get into there. For the rest of the docs who aren't leading these programs, they get a little bit of money just for kind of participating, showing up, complying with protocols and things like that. And again, this money has some metrics. So you need to be able to produce, you know, here's the protocol we came up with. Here's our compliance rate and things like that. And of course with time, the theory, the way healthcare reform has gone is that the percentage of your salary for those non-clinical metrics will increase and also the bar will raise. They'll become a little bit more complicated than just showing up for a meeting. And again, you've got to be real careful about fair market value and how you justify hours per week and dollars per hour. And finally, call. So we've seen a couple different versions of some of these call plans. In one, the minimum amount of call was baked in. So they assumed that for us, our base compensation included one in every five days of call. If you took more than that, you took one in four, one in three, that excess would get paid. Then most recently, after a lot of docs complained, they started paying call from day one but at a much lower rate. And it's kind of interesting. A lot of docs actually made out better under the old way, but it just seemed to them like they weren't getting paid quote, unquote, when the first number of days was baked in, even though it was a higher dollar per work hour value. So we need to sit down with a pencil and paper, a computer, and figure out what's the best system for you and how all this can work. And again, fair market value, the consultants are all over that with call comp. Non-compete clauses. I don't quite know where to put this in, but this is a huge issue. And again, some basic considerations here. If you've been in a community for a long time, and you decide to go from your long established practice to work for a hospital, you probably don't need a non-compete clause. And you have a strong basis for saying forget it, because you're actually bringing a lot of value to them. But if you're going from the west coast to the east coast to take a job, you have no prior reference base in that community, so they can get you. And again, they say you can't set up shop anywhere from 10 miles, 25 miles, 50 mile radius. And if you go there, and you wind up one of these horror stories that Andrew talked about, and your family's been there for a year, what do you do if you want to quit? You've got to move 50 miles away, you've got to drive 75 miles just to get to work. It's a problem. It's really something to think about quite a bit. And again, value propositions. So where we are, it's supposed to be an academic place, a community hospital transitioning to academics. In terms of research, they like to think you're going to make a lot of money off that. They think that, okay, Dr. Walke, you can patent something or invent something and we get a big share of the IP. Maybe. I hope it works out that way. We'll see. But education, you're not going to make money on that. If anything, you're going to lose money. It takes a lot of time to educate medical students and residents. So be careful. If a place says they really want to be an academic center, but they don't really have a well-thought-out plan for how to subsidize some of these money-losing things, be careful. So a little bit, a few comments now on ACO. So this is really the whole reason why the healthcare system has to change. This is your federal budget going out to year 2022. And this is Medicare, Medicaid, insurance subsidies. This is the single largest driver of growth. And it's orange is Social Security. Discretionary spending actually drops a little bit because there's no money left in the budget. So we've got to get a handle on this. The problem is that what we do is really kind of below the radar screen because the Medicare, Medicaid people, what are they concerned about? What chews up their budget? Diabetes, hypertension, obesity, heart disease, asthma, you know, these long-term chronic conditions. And really, what's the one condition in which neurosurgery gets their attention? Spine. You have back pain, lumbar fusions, things like that. But generally, they're not going to give you a hard time for taking out a brain tumor or doing an acute subdural in the middle of the night. You know, you usually need to do that. And they're just not high-volume items. This is quality. When you hear all this talk about quality healthcare system and ACOs, there are now 33 measures in the Affordable Care Act, about half as many as there were initially. Look what you're talking about. Medication reconciliation, screening elderly people for future fall risks, flu shots, body mass index screening, controlling hemoglobin A1C, controlling blood pressure, lipid control. What does that have to do with performing an anterior cervical discectomy effusion? Not much. The problem is, you know, we are going to get squeezed and hospitals are going to have to start ratcheting back costs. Now, right before I came to this meeting, I had to talk to a bunch of trauma surgeons at a meeting about this stuff. You know, the talks I gave on brain injury management were easy. This was the most difficult talk I gave. And they were wondering, what's a trauma surgeon going to do? You know, a chest-abdomen surgeon going to do? And there's not a whole lot written about that that I could find, but the basic argument there was that they need to make themselves more indispensable to the hospitals. You know, take a lot more of the trauma call. Make sure your group controls the schedule. You can write the protocols and you have a little bit more leverage in terms of getting patients out and decreasing costs. There may be opportunities there also for you since there's going to be this increased pressure to get people out. Maybe you can partner with a hospitalist or tell the hospital to get some good hospitalists to help you. Maybe you can use this as leverage. Say, look, if we can get a guaranteed first start time, we can move patients through the system sooner. We don't necessarily have to take out that appendix at midnight, which is a lot less efficient for the hospital. So the interesting paradoxical result there is that hospitals are going to need us more than ever because there's no way they're going to decrease their costs and be efficient without our help. And yet, as we've heard both from Andrea and from me, you have a lot less autonomy in decision making. So we're essential to them, but they treat us like dirt. Go figure that out. Really, the only answer is to try to get as involved as you can and be the one making some of these decisions, creating some of these protocols. So my last few slides now, some advice and things I've learned and things I've heard from other doctors. I'm tempted to pull up this great picture from Animal House. My advice to you is to start drinking heavily. It may not be quite that bad, depending on your situation. Here's the thing. I've looked at a lot of jobs in my career, and usually you don't go. You've got to think about both the push and the pull, right? Because every time you go in a job interview, you leave there and it's great. They've done a great sales job on you. You think this is going to be a great place to practice. You're on a plane flying home, and you're starting to think about moving there. But once you get back home and get back to your own job, you start thinking, it's really not that bad where I am, or it's not worth leaving. There might be a little bit of a pull to go there, but really I'm not feeling the push to get out. I love what Andrew said about intuition. You'll know when your situation is so bad, you're really willing to almost go anywhere to get out, that's a good sign that maybe that was the right job for you. Maybe you should go back for a second interview. Yeah, I would probably do it again, because again, things are pretty unstable, as I told you, in Texas Medical Center. I wasn't sure about the future there. Wound up going into a place that's pretty wild and woolly and unstructured, but it's a great community where I am now, and there's a big upside in terms of academic growth and opportunities to get involved in that kind of stuff. And again, this is such a big point that you've heard over and over now. If you're someone who really needs to be in control, be very careful about going and becoming hospital employed. It may not work for you. And I don't mean to say just take care of patients, I don't mean to belittle that at all, but if you just want to be a clinical guy, it might be a good situation, because you're freed from a lot of the burden and the hassle. The other problem, too, is what's your tolerance for bullfeathers? Because we all have to do enough of this stuff, right, with our HIPAA training, you've got to remind yourself every year not to stick yourself with a bloody needle from an AIDS patient and sign off on all that stuff. But then you've got to sit through these corporate initiatives. A lot of it is like the TV show, The Office. The latest initiative to improve customer satisfaction, and you sit through that stuff, and then there's another one six months later, and another one six months after that. You're better off if you can just swallow it and smile, but it's really hard for neurosurgeons to do. Finally, my last picture from movies, you all know, remember this slide, you can't handle the truth, and this is something else that came home to me. What Houstonians did I show on my very first slide? Who was a doctor? Anybody remember? Michael DeBakey. How many huge, big-name surgeons out there like DeBakey? DeBakey, Crawford, Shumway, Starsall, all those guys? You don't really hear about them anymore, because it's not so much about the individual doctor, it's about the institution. When someone gets sick, I've had friends on the East Coast call and say, hey, I've got my friends who've got cancer, anybody at MD Anderson, Mayo Clinic, Harvard, stuff like that. That's where they want to go. Unfortunately, it's not because they want to fly across the ocean to see Dr. Vlodka. They want to go to the institution. For better or for worse, you've got to realize we're just becoming cogs in a wheel. You can try to become sort of locally famous. I know that if I've been working in Lexington for years, Jim Bean's office will see my patient, take good care of them, and everyone will be happy. Unfortunately, there are lots of places like that. The theory among the administrators is you can just take out Dr. Bean and replace him with someone else. That may not be true, but that's how a lot of them think about it. It's becoming more about the institution and not about the individual physician. That's how I have it again. A reminder, as Dr. Tippett said, this whole seminar is being put on by the Neurosurgical Research Education Foundation. You can probably access it with your smartphone right now. Log on and make a contribution before you leave today. Thank you. Next, we're going to, or Pat Hostra is going to teach you about contracts. She has a great deal of experience in healthcare law. She practices in Chicago. For Duane Morris, a law firm there, she has handled physicians, physician groups, hospitals, regulatory matters, fraud and abuse, virtually every aspect of healthcare. I think we're very fortunate to have her come with us today and to talk to us a little bit about this contracting that you've already heard some about. She's going to tell you what you need to know. Pat went to law school at Ohio Northern and she also had an undergraduate degree at Penn State University. Please welcome her. Thank you very much, Dr. Tippett. Well, it's a pleasure to be able to be here with you today and present to you. I chose the topic or the title for my presentation. If I were your counsel and you were my client, I tried to distinguish what I was going to say from what you might hear from the other speakers. There will be some overlap to this. When I first came in, Dr. Bean was talking about legal and legal and I didn't turn around to interject or anything, but there are two kinds of counsel. There's your counsel and then there's the hospital's counsel. You need to think about your counsel as being your friend and the person who represents you. So what does it mean to be counsel? From my perspective, it means that we have a collaborative relationship and strategic advice. I don't just do documents for you. I don't review your contract and just tell you the terms of it. It's really collaborative relationship and strategic advice. So, finding the right counsel. I always cringe when the first thing a doctor says when he calls me is, how much do you charge per hour? Because it's not how much I charge per hour, it's the value that I ultimately can bring to you in the service. But you need to find counsel with experience. Counsel who have been involved, who know your business, know the business of neurosurgery, and know the business of your potential employer, the hospital. Dr. Tippett told you that I have an undergraduate degree from Penn State. My undergraduate degree actually is in nursing. I worked for a very short time as a nurse. I knew when I was in law school, or in college, that I wanted to be a lawyer and I knew I could get into law school with a degree in nursing. I worked for two years between college and law school as a nurse. Primarily in an orthopedic unit in a hospital. When I got into law school, they transferred me to the neurosurgery unit for some reason. But it helps me kind of understand what you're talking about. I also have a brother who is a pediatric chemo doctor in a faculty practice plan here in California. A brother-in-law who is the head of an ER practice. I actually represented my brother-in-law as an ER practice. They, at the end of March, sold their practice, a hospital-based practice, to a publicly traded entity, a huge corporation. A big C-shift for them. But that's a whole different variety than just the faculty practice plan or the sale. And then I have a niece who is a hospitalist and does NICU three days a week, 12 hours a day. You need to find counsel that's a good fit for you. I just attended a program where they were talking about lawyers and clients and saying that the lawyer and the client need to like each other. I would say they need to be a good fit. We don't have to be best friends. But you have to be comfortable with what your lawyer is doing. And your lawyer has to be comfortable and understand what you're doing. So, if you were to come to my office, first I wouldn't make you get naked and get in a gown and sit in the waiting room while you waited for me. And I wouldn't make you wait for an hour to see me. I would see you at your scheduled appointed time. And that's what I say to my doctors too. If I sit and wait, I say, I do not make you get naked and wait for me. Anyway, so I would say to you, so why are you exploring employment? What's your goal? Where do you see yourself in five years or ten years? And we were talking about why are you exploring employment? When my brother-in-law's group sold to a publicly traded corporation, they looked at multiple million dollars that they were going to get in exchange for the sale of their practice. And that was their major enticement. There was some discussion, and I'll talk about non-competes later, some of the younger physicians in my brother-in-law's practice, because there was a huge non-compete, said, oh those non-competes are not enforceable anyway. We're not going to worry about them. They are enforceable and you need to worry about them. But I would say to you, where do you see yourself in five years? Where do you see yourself in ten years? What do you want to do? What do you want to accomplish in your practice as you go along? So my philosophy would be that if you're going to go into hospital employment, you do it with your eyes wide open. You know what your tradeoff is. You know what you're giving up in exchange for what you're getting. One of the things that hasn't been touched on here, and looking at this audience, I'm suspecting that some of you actually have an existing practice now. So the question is, are you selling your existing practice to the hospital and becoming hospital employees, or are you just getting right out of fellowship and becoming a hospital employee? And I'm just going to touch a little bit on selling your existing practice because it's an area where I do a lot of work. So if you have an existing practice, is the hospital going to buy your current practice? Are they going to buy its assets? A big question will be whether it's an asset purchase or a stock purchase because that will make a difference in liability. It will make a huge difference in tax. How are they going to value your practice to determine the sale price? What things are going to be considered? And I won't go through that list, but one of the big areas on that list is going to be goodwill. And you will consistently hear the hospital say we don't buy goodwill, we don't buy goodwill. It's a really important thing to negotiate because one of the things that happens with goodwill is what's considered capital gains versus ordinary income for tax purposes. So if you sell your practice for $2 million, and there are practices out there that are being sold for $2 million, there are practices out there. Northwestern Memorial Hospital just bought Northwestern Memorial Faculty Foundation for multiples of millions of dollars. It makes a huge difference whether you consider it capital gains versus ordinary income. And I'm not going to give you advice on it other than to say you just need to think about it, you need to talk to your accountant about it. And the more you can make that purchase price goodwill, purchase of an existing workforce in place, it will make a difference, a significant tax difference for you. So what happens to your lease, your real estate, your equipment? What happens to your 401K or other retirement plan? There was a little bit of discussion up here before the presentation about how there was a pension, there was a good benefit plan. In my experience, when you become a hospital employee, if you've been in private practice, it has a negative impact on your ability to save for retirement. And it has been for some of my clients a single deterrent in terms of becoming employed. The other, if you own part of a surgery center, an imaging center, will you have to give that up? A lot of my clients are invested in ambulatory surgery centers, several of my clients are physician owners of hospitals. Is that something that you're going to be forced to give up? And sometimes you can negotiate that and not have to give that up. Sometimes you can be an investor in an ambulatory surgery center that might be partially owned by the hospital, partially owned by a physician group, and the hospital would allow you to get it. Here's a really important question. Will the hospital pick up your malpractice tail? And that's not only an important question if the hospital is acquiring your practice, but it's also an important question if you're becoming a hospital employee and you ever leave to think about malpractice tail. I represented a physician this week and he was facing a huge malpractice tail, as all of you would as neurosurgeons. He was going into a hospital-based practice where the hospital had a self-insurance trust and we were able to negotiate that the hospital would pick up prior acts, or what they call nose coverage for him, so that in effect he had no tail. He had always practiced at that hospital. He was moving from being a practitioner into being a hospital employee. So we saved him a quarter of a million dollars by having the hospital pick up the nose coverage and the prior acts. So that was very helpful. All right. So will all of the physicians in your group be employees? Are they going to just take part of your group? Are other people going to remain in private practice? What's going to happen to your staff? Or just things that you need to think about if you're selling your practice? So here's a horror story that I'm going to tell you. I represent a physician who for 10 years has practiced at a hospital as a private independent practitioner. He leased space in the hospital. He was the section head of his section. He was responsible, did all kinds of call coverage, did all training of residents and things like that. He was in negotiations with the hospital to purchase his practice and in negotiations with the hospital to become a hospital employee as one partner. They went through a practice valuation, which the hospital did, came back with a valuation that both the hospital and the physician agreed on. We were negotiating employment contracts at the time. We were negotiating the asset purchase agreement at that time. And the hospital got purchased by a large system during the transaction. So the particular transaction that we were working on went to the new system's legal counsel and to the new system's compliance department. And all of a sudden, because in exchange for his section head duties and responsibilities and in exchange for a number of other administrative responsibilities, the hospital had provided him with a nurse. The system came back and said, we made a mistake. You owe us a million dollars for ten years of nursing services that we provided to you. So if you want to become our hospital employee, you have to sign a note to pay back this money and we're not going to pay you any money for the practice. That's happening right now. What we did was say, all right, for ten years we've provided section chief responsibilities, we've provided administrative residency, we've provided charity care, we've provided all these other things. Here's our bill for $1,500,000. And so that's where we are right now. We have a bill from them for a million dollars. They have a bill from us for $1.5 million. And on Monday, tomorrow, it's supposed to be resolved. But the moral of that story is you can have a really good working relationship and overnight if your hospital gets changed, you're married to a different partner. And that different partner can change the rules. All right, so compensation. How are you going to be compensated? Straight salary, base salary plus productivity, productivity. How is your productivity going to be measured? Worked RVUs, collections, billings? Can you get a bonus? If you do get a bonus, how are you going to get that bonus? As I was preparing for this, Modern Healthcare came out with a cover story. Physicians as loss leaders, hospitals gamble their big bet on highly paid docs will pay off. I'm telling you, it's paying off right now and people are making a lot of money selling their practices. They're making a lot of money becoming hospital employees. I don't think it's going to last. I think the bubble is going to burst. Your contract with the hospital is most likely three years. You might be able to extend it to five years. I've never seen a contract with a hospital that extended beyond a five-year period. At the end of that five years, the ball game is going to be very different. I'll tell you a story about how that changed a little bit later. All right, so what benefits are you going to receive? If you were in private practice before, you probably had a car allowance. You might have had a computer allowance. You might have had all of these things. You're going to get some things. They'll probably pay your medical staff dues. They'll pay your malpractice insurance. They may not pay some of those other benefits that you have to give up. They'll probably pay your IPA or PHO dues. You'll get health insurance, which will probably be cheaper and better. You'll get vacation, paid CME. It'll be a little bit different. Your retirement will be different. Will you have to have administrative duties and have to attend meetings? Before I went into private practice, and I've been in private practice now representing physicians for about 15 years, I worked as in-house counsel at a hospital. My days were filled back-to-back with meetings. I would go to a meeting. I would get a lot of assignments. I'd go back to my office, put them on my desk. I'd go to the next meeting and get more assignments. When I went into private practice, I was freaked out that I would go to work and I wouldn't have a list of meetings that I had to go to. That's because in a law firm, it's based on your productivity, and meetings aren't particularly productive. So you need to think about that. Are you going to have to attend meetings? You're going to spend a lot of time doing that. Are you going to get compensated for those non-clinical responsibilities? What's that compensation going to be? We've talked a lot about compensation for call coverage. Who's going to do your coding and collections? I have a great horror story on coding and collections. Will you be able to have outside activities such as consulting contracts with drug and device manufacturers? There may be a short window opening still with those, but I've represented a number of groups where physicians have made a substantial amount of money from consulting contracts with drug and device manufacturers, clinical research, expert testimony. Are you going to be able to review cases? Are you going to be able to testify? One thing that's not in there is IP. You may think that you're not going to invent some wonderful device and that IP will never be an issue, but look at your employment contract with the hospital and see if it says that if you invent something or come up with something, it automatically belongs to the hospital. Because you could invent something that would give you royalties forever and it would be a big boon for the hospital and not such a big boon for you. So think about that specifically. That's something that we've been able to negotiate out of contracts. I have had doctors who thought that they were never going to invent something and then they make an adjustment or they come up with some new thought that changes everything, makes a lot of money, and you have to think about is that your money or is that the hospital's money? Is the hospital paying you to do that or are they paying you to treat patients? So does the revenue go to you or does the revenue go to the hospital? And that can be negotiated. Will you be able to receive revenue from ancillary services as outpatient procedures performed at ambulatory surgery or imaging? You're most likely, if you're going to be a hospital employee, giving up all that opportunity for outside revenue. That's where you have to decide whether it's worth it or not. Will you be required to participate in Medicare and Medicaid and take charity care patients? Generally, yes, if you're employed by a not-for-profit hospital or health system. If you're employed by a for-profit hospital, you will still probably have to take Medicare, Medicaid, and charity care patients. But are there going to be any limits on the charity care, Medicare, or Medicaid patients that you have? And the reason limits can become important is, as Andrea said, it's insurance blind in the beginning, but the hospital's still going to look at the revenue that you produce. And if it's a lot of charity care patients, you're not going to be producing that revenue. And ultimately, that will have an impact. Despite what you'll hear from administration, it will have an impact. Okay. Here's another horror story, the billing and coding callback. I represented a group of physicians out in Colorado. I did not represent them when they became hospital employees. They sold their practice to a hospital. There was a provision in the contract that the hospital was going to do the coding and the billing for them and do the compliance review. These doctors were real heavy on level four visits and heavy on their coding and billing. The hospital conducted an audit of the physician practice because the physician practice got one of those Medicare letters. I don't know if you've seen those, but Medicare sends out letters to outliers, to people who are at the top end of billing, which says, here's what the national averages are. Here's how you compare to those national averages. And I've represented a physician in Texas and a physician in Georgia who were both the highest Medicare providers in their specialties in those states, guaranteed to get you an audit. So these four docs got an audit because they were real high on level four billings. The hospital conducted a compliance audit. The hospital decided that their documentation did not support the level of service that they were providing. The hospital paid back Medicare as an overpayment, several hundred thousand dollars for what they considered to be the physician's incorrect billing. And then they clawed back from the physicians. And they went to the physicians and they said, we paid out $280,000 for the four of you. It's coming out of your salary. So for the next eight months, you're working for free and you have to pay us back this amount of money. We said, wait a minute, you did the billing, you did the coding, you were responsible for compliance. You should have known that the documentation didn't support those level four bills that you were sending out. And you made that repayment to Medicare without consulting us or without coming to us and saying, is there more documentation, is there something else we can do? So we did negotiate a shared responsibility and compliance going forward. So the physicians ended up not having to pay the entire amount out of their practice. But if you have an employment contract, watch out for the billing and coding clawback. I see it in a number of contracts where if you're paid based on your productivity and Medicare doesn't audit and there's an overpayment or RAC doesn't audit, a recovery audit contractor says there's an overpayment, make sure that it doesn't 100% come out of your salary. Or if it does, that you do it at least with your eyes wide open. All right. So this is important. Will you be employed directly by the hospital or employed by a subsidiary of the hospital or a practice group owned by the hospital? My preference would be that you get employed by a practice group owned by the hospital because at least you'll be employed by someone who knows your business and does your business. And there are a number of hospitals and health systems that have physician-owned practice groups. Who are you going to report to? There are some physician groups who end up reporting to an administrator within the hospital. And that administrator has authority over the schedule, over the practice location, over billing rates, over how much staff you have. I met with a physician this week who is leaving her practice group. She did not consult with me before she signed her employment contract. Her employment contract said she would see seven patients per hour. She would operate at least four hours a week. And she would have a minimum of 32 hours of in-clinic responsibilities. And she was grossly overworked from it. I'm looking at it saying seven patients an hour. Maybe you can see seven patients an hour. But maybe you have one patient who takes an entire hour. And then you're not in compliance with your contract. And what ended up happening is she was scheduled to see a huge number of patients. And she would start work at 7 in the morning and still be seeing patients at 10 at night. And then she got really terrible Prisgini reviews as a result of it because patients were waiting forever to see her because they were scheduling seven patients an hour. So be aware of that. How often do you have to be on call? I know the two speakers before me talked about call coverage going down. I've actually seen circumstances where call coverage has gone up and where hospital-employed physicians have become responsible for taking 100 percent of the call. So you have to make sure that you know what it is and what that call is going to be. And the problem will also be, and it's a very prevalent problem in neurosurgery, there are a limited number of neurosurgeons. And so your call is going to be more frequent. And if you go into a hospital-employed practice and there's three neurosurgeons and you say, all right, I'll be on call one-third of the time, but one of those neurosurgeons leaves or is unavailable, then there are only two of you. And I'll guarantee that your contract says that you have to cover that void and make up for that in the absence. So where will you be required to have medical staff privileges and take call? Andrea talked about one of her clients that was a hospital system with eight hospitals. It's possible, depending on the system, that they're going to want you as a neurosurgeon to cover all eight of those hospitals and be a roving neurosurgeon. Here's another issue. Will you be able to limit your practice to a specific subspecialty or do you have, we have to have core privileges in addition to your subspecialty? That has come up because we see so many people subspecialize, neurosurgeons who just do spines, neurosurgeons who just do brains, neurosurgeons who do a certain thing. But you all probably have core privileges to do general things. I had a neurosurgeon who only did spines and he got into a fight with administration and all of a sudden he got put on, he had not taken call forever because of the nature of his practice. Because he had core privileges to do all the general neurosurgery things, he got put on the regular call schedule and actually punished as a result of it. And so we had to look. And they said, he said, I haven't done anything but spines for 20 years. And they said, well, you signed off and you said you had core privileges and you were qualified to do all these general things. So unless you tell us you're not qualified, then you have to take the general core privileges. So how will your practice interface with interventional radiologists? I worked with a neurosurgery group in an academic medical center that provided neurosurgery services to a number of community hospitals under contract. It was really lucrative. They got into a huge fight over what does the interventional radiologist do, what does the neurosurgeon do, what's the responsibilities. Just make sure that you know how your practice is going to interface with those people. Well, you have a dedicated nurse and other staff. And that happened in a physician practice where a neurosurgeon had a dedicated nurse who had been with him forever. He, she was an added expense. She didn't serve anyone else in the practice. She was strictly for him. When he joined the hospital as an employee, he got assigned different nurses every day in clinic and couldn't have his own nurse. He offered to pay for his own nurse out of his salary. And the hospital administration refused to allow that to happen. All right. Here's one that hasn't been mentioned. If the hospital is Catholic, are you going to be impacted by religious and ethical directives? For example, the use of stem cells to treat various conditions. You know, neurosurgeons will say, well, we don't do abortions. We don't do birth control. But stem cells are becoming prevalent in a lot of areas. And in Catholic hospitals, you'll find that there are some hospitals that won't allow you to participate in any stem cell research or any stem cell activities. So be careful about that. And a lot of that is driven not only by the Catholic hospital, but by the rules of the archdiocese, for example. I know that if you're in the Archdiocese of St. Louis, you can do some things that you couldn't do in a Catholic hospital in the Archdiocese of Chicago because the bishops have interpreted the ethical and religious directives differently. So just think about that if you ever think that stem cells are going to be part of your practice. Indemnification language, coding and billing and a code of conduct. Look at indemnification language in your contract. If you agree to indemnify the hospital, that's an out-of-pocket expense for you. I looked at a contract for a pediatrician who was going to be employed by the hospital. It required that pediatrician to indemnify the hospital if anyone accused him of sexual harassment or making an unpleasant work environment. I said, you don't require your other employees to indemnify if they get accused of it. Well, we've had problems with doctors before. I said, I cannot let him go into this position and agree to indemnify you if some nurse complains that he was an inappropriate harasser and pay all your legal expenses on all your fees. And we fought over that. It came out. But I am seeing more and more indemnification language creep in. And that was indemnification language on the coding and billing and code of conduct. So what happens if your practice merges with another hospital or system? And that's what happened when I told you about the one doctor who was in the process. Will there be a non-compete in your contract? And what will the terms of the non-compete be? How can your employment be terminated? You'll probably see termination with or without cause on 90 days, 120 days. And that means that even though you think you have a three-year contract, you really only have a 90-day or 120-day contract. And you're going to see a provision that says you can be terminated immediately for cause, which means one day they determine there's cause. And you'll see that there will be subjective and objective provisions in terms of termination for cause. Some of them you might not have any control over. You might see something the hospital determines it's not in their best interest to continue to employ you is a four-cause termination. Be really careful about that. And then what happens to your patients when your employment is terminated? I always put in contracts for my clients that we follow the AMA guidelines, which means that your patients have to be notified that you're leaving, and your patients have to be notified where they can contact you. I've had some experience with hospitals where the physician has terminated employment, and the hospital won't give the patients any information about where they are or where they're going, and it leads to problems with potential patient abandonment and other things. Once you say, though, we're going to agree to follow the AMA guidelines, which are pretty direct in terms of ability to get records and ability to notify patients, I've never seen a hospital object to that, so that's important. And then what's the exit plan if things don't work out? You really need to think about, what am I going to do if this doesn't work out? If you move to North Dakota and it doesn't work out, what are the options? What's the exit plan? And if you sold your practice to the hospital, can you go back to the way you were before? So here's another horror story, and this is my last horror story. But a group of physicians, 87 physicians in a multi-specialty practice, sold their practice to a hospital. Ten years later, the hospital had a change in administration. For ten years, things had gone along really well, and everybody was really happy. Administration had been very, very physician-friendly. A new administrator came in, and the first thing the administrator did was say, these 87 physicians are not productive. They are a drain on us financially. Sent 87 physicians a notice of termination, mass termination, every single one of them, and said, all of you were terminated. Here's your 90-day notice. If we want you to come back, we'll send you another contract within 30 days. Those that could leave and find other positions did. Several of them struggled. I ended up representing about 12 of the 87 who left. The hospital tried to enforce the non-compete. One of the physicians, because they had this 90-day period, one of the physicians who was particularly outspoken was actually suspended for insubordination when he said how unfair it was what the hospital was doing. So he got suspended on a Friday for insubordination. All his patients show up on Monday. There's no one to see the patients. Nothing's going on. So they call him, and they say, you have to come in and see your patients. He said, you suspended me for insubordination. I'm not coming in. They said, come in through the back door. Don't let anyone see you. See your patients and leave through the back door. He said, I'm not doing that. And he was the kind of physician who had given several of his patients his cell phone number. A couple of his patients called him. One of his patients actually went to the hospital's physician office building and put flyers on all the cars about how unfair the hospital was being to its physician group. And then the hospital did what I thought was kind of unthinkable. They arrested the patient for trespassing. And it made the front page of the paper. I mean, who would do that? So anyway, so here are some alternatives to employment. Physician service agreements. Physician service agreements are sometimes called employment light agreements. There's a lot of discussion about them. I would be very careful about them for one reason. They can work, but the IRS wants to consider everybody an employee because it's better for the IRS for tax purposes. You can have a professional services agreement, an independent contractor agreement, an employment light agreement, and the IRS can come back and say it's not really an employment light agreement. It's truly an employee agreement and run into problems with that. Exclusive contracts, co-management agreements. I know I'm running out of time. So call coverage agreements, contracts to provide care to uninsured or underinsured patients, and medical director agreements. I kind of like co-management agreements, but if you wanted to do a co-management agreement and the reason you were becoming an employee is to get out of the administrative work, co-management agreement wouldn't be good for you. But if you thought you could run a hospital better than the hospital administrator, think about a co-management agreement. And then, all right, so your objectives in this course were to be able to evaluate hospital employment, know contractual issues regarding hospital employment, have insights into nuts and bolts, and have a knowledge base. So I hope I've helped contribute to that, at least in some way. Thank you. Thank you, Pat. I think you've succeeded in scaring me today. Next and finally, we have Jim Bean. Jim Bean, as most of you know, was president of AANS 2008 and 2009. And what some of you may not know, he's had a vast experience in socioeconomic issues within and without of neurosurgery. He trained or went to undergraduate school at UVA and then went on to Kentucky where he did his neurosurgery training and subsequently was in practice, in academic practice there for a time, and then went into private practice in Lexington where he remains today and has been head of a four-man group which in recent times have become hospital employees. So we today are getting the perspective of physicians who've been outside of hospital employment and now have become hospital employees. As I said, Jim has a vast amount of experience. He represented you in the RBRVS. He was over our coding and reimbursement committee for a period of time. He was head of the Washington committee for a period of time. So Jim, please come tell us about your new experiences. Thank you, Troy. Thank you. Can everybody hear me? Mike? So this is advanced? Yeah. All right. I'm 65 years old. That's important. And I sold my practice with our four guys in 2012, January we made the transition. There were four of us. Now I can tell you all about that. I can tell you about both sides. So that's basically what I'm here to do is give another perspective. But I want to know a couple of things first about who I'm talking to. How many here are either in fellowships or in residencies? Goodly number. So you're thinking of what to do. How many here are actually employed by a hospital or in a hospital-owned practice arrangement? OK. Good number. How many here are in an independent practice and thinking about a transition? Small number. OK. So we got looking at all different sides of it. We've already had most of the discussion about the issues. I cannot tell you anything new. I can tell you what my experience was. And it was basically OK. I sold my independence to get more money. That's the bottom line. That's what happens. So what's it worth to you is the question. If you're in a practice. Now if you're looking to go from your fellowship or residency into a practice, there are some things I might tell you about what you want to look at. Now, we won't have much time if I use up all your time to let any of our panelists answer any of the questions that have come up. We have a lawyer. We have a recruiter who's seen where people go. And we have a doctor who's made the transition. Any questions right now for any of them that you've been wondering about? All right. Let me tell you a little bit about what I've done and why I've done it. And I hope it helps because it's just another perspective. But you have to realize my situation in life. If it doesn't work, I can say goodbye and there's no penalty. Not all of you can do that. When we made the agreement with our group, I have younger guys. They got a long horizon out there. I said it's not my decision, it's yours. We were losing money. We were seeing our income gradually decline and we knew it was going to keep going down because we were getting basically professional fees and a little bit of ancillaries, but not a lot. And we didn't have the opportunity to get a lot of ancillaries. That's the key in a private independent practice group. If you don't have access to ancillary income, either your own investments or what you're getting from a hospital, either for a call or directorships or something else, if you can't supplement your professional fees by about 35 to 50 percent, you're not going to be happy for very long. Because the professional fees, those RVUs, they're on that downward slope. That's what's happening. So that's why we did it. It was a crass money arrangement. I had practiced with this hospital for 30 years and I knew who was there, I knew who I was dealing with, and so I decided, okay, they may walk out on me, but not very quick. Not in my horizon. Maybe, maybe not. And that I was actually wrong. So that's, I have a different perspective, but that's why we did it. There's a debate about how rapidly doctors are being employed by hospitals and Accenture gives this from a survey of about, I don't know, 700 people. I don't know, that's not truly accurate, but it does look like the percent of independent practices have dropped dramatically. You notice they say now practicing physicians are 700,000, but only 290,000 independent. Well, that may or may not be true. If you look at Merritt Hawkins, and you can look this up online yourself, it's their 2012 review of physician recruiting, these are the, these are what their clients were looking for. How many were looking at hospitals versus independent practice. And you can see that after Obamacare, with fears of what everything might happen, the number of recruiting assignments for hospitals went up pretty dramatically. Pretty dramatically. And Andrea, that reflects your experience, right? Indeed. Most of your assignments are from hospitals or looking at hospitals. Is that correct? I would say that the trend, so we can talk about that a little bit, there's a couple of things going on. I would say certainly there are hospitals, more and more are looking for neurosurgeons and there's been an upsurge in the number versus private practitioners. But I also want to say one other point, which is, and I say this particularly to my residents and fellows who don't really know what's going on because they're too focused on being trained to do neurosurgery, not looking for a job effectively. The other trend that I've seen in several areas of the country is where the neurosurgeons don't want to lose the autonomy and the leverage that they've had for so long. And they're too small to stay solid as a private practice on their own. So they've decided to build sort of a consortium of neurosurgeons. So those kinds of practices stay strong. The sort of mom and pop shops, you know, the solo guys, they're going away more and more unless somebody is in an area where there's not a whole lot of competition and they have a strong business acumen, frankly. So, you know, I'm seeing both of those trends going on. So there's a lot of different ways to cut this bread. And everybody's going to see a little bit different view of it. But there is a very strong movement, it seems, toward affiliation with the hospital in some way. Now how much, how many neurosurgeons are actually employed by hospitals or practice? I don't know. And I don't think anybody up here knows. And until the AANS does an accurate survey of its members to find out, I don't think we'll ever really know. So we're using indirect data or evidence. And this is an AMA practice survey done in 2012. And they say, well, surgical subspecialties are a small number in 2012. So it's probably actually growing from a small number. I am probably a small minority even now. But if you take most of those in training who are coming into a practice of some sort over 10 years and looking primarily at hospital practice, that's going to change, I would imagine. I don't know, but I think so. And the comment of the stress on a practice, which is a small mom and pop practice, which I guess ours was, is a real consideration. And it's going to get worse. The expenses go up. The professional reimbursement either stays the same or declines. And you can only run a little bit more faster on your treadmill, and there's no more time. You can't do that much more. There's just so much you can make up by more volume. So anyway, that's where we are. What did I find was the big difference between being in a hospital practice and in a private practice? I'm doing the same thing, the same way, the same schedule, everything else I did afterwards as before. I'm practicing as a doctor exactly the same. Those are the only real differences. You lose your autonomy. You can't, I ran a practice, so it was nice. My office manager would tell me when a decision needed to be made. I didn't try to run the practice. I let her make the decision, but I knew I had oversight. I don't have oversight anymore. I have to call human resources to ask about my retirement plan, or do I have one, or what's it in. I can't get my office manager to take care of that for me. I'm an employee, and I resent it, but that's life. You get used to it. Financial reserves, one of the reasons that really drove this decision is we were looking at recruiting, and traditionally in a practice like this, you recruit at about half what you make, and you bring someone into the practice, and the tradition was to build a practice over a year or two, and then jack the salary up, and we all shared equally. We were socialistic, but we all worked pretty equally. We found out that we could offer $300,000, and then he left us, and next week went to a hospital and got $600,000 walking out the door. I said, well, we're almost out of business. We can't do that, because if we give him what I was making, then I'm going to make less than him, and he's never worked a day in his life outside of his residency. It didn't make any sense. That was another real reason. The other thing about private practice is you have personal financial risk. You have skin in the game. We had an MRI scanner. We did not invest in an outpatient center, because we had problems doing that. It would have helped us to stay in private practice longer. If you have an investment in an outpatient surgical center, and you share in the facility revenue, that's that ancillary income that helps substitute for what has lost with professional revenues over the last 20 years. We couldn't do that. But you have to invest in it. You got to take your own money and put it into it. If you move into a new office, and you want to fit it up, you invest the money. You take out the half million, $750,000 loan. You're personally responsible for it, and you got to pay it. You hope that your accounts receivable come in on a regular monthly basis. Well, it doesn't. They hold onto that stuff for a while, and you can have big ups and downs, but you got your expenses to pay out all the time. You are taking the personal financial risk. So those are the things that are different by being in a hospital-owned practice. So small group. This was the last year we were in. Decisions. They're fast. If you go down the hall, there were four of us. I was one, and I had three others. I'd go down the hall and ask everybody, what do you think? We don't have to wait a month to have a meeting. We just get a consensus, and then we go do it. And tomorrow, it's done. Sometimes we got to talk together, so I have to call a meeting. Don't like a lot of meetings. Just call them when you need to have them, because you can't get consensus among everybody. We talk to each other. You all do that. Income. In private practice, pro fees, professional fees, shrinking amount, ancillary income, hopefully growing amount. If you don't have the ancillaries with all these different sources, you're going to be sucking wind relative to everybody else. You may preserve your autonomy, but you won't have the same money. We have some kind of production salary, but your salary is dependent on all these revenues coming in. Any new expense, your salary is what's left over, and you're going to have to adjust it downward. Or you just don't give yourself any bonuses. That's what we used to do. Give ourselves bonuses. Big bonuses. And then the bonuses shrank, and then they just went away. Now I just had my salary to rely on. Financial risk, I mentioned that. Recruitment, I told you about that. So every new administrative expense reduces my income. Okay, well I go to a hospital. What's the difference here? Decisions, they're slow. They are ploddingly slow, glacially slow. You cannot get people to answer you back. You're just an employee. Now I exaggerate a little bit. You are a neurosurgeon, so they will talk to you. But they got business. And if you want to go to your legal department, when you hire your own lawyer in a private practice, he's going to talk to you today. When you have a legal department that's in Louisville and I'm in Lexington, they'll talk to you in about four weeks, maybe if they can fit you on the schedule with all these other things that are in line to talk about. And so on with maintenance and everything else. Income, it's a lot easier. You negotiate a salary with the hospital. They are responsible for raking in the money. They're going to pay you that salary, plus any bonus arrangement that you have. And I'm not going to talk about that. But it's fixed by contract. Ours is with RVU goals. Our RVU goals were based on the year, what we did the last year that we were in practice. We were expected not to take a vacation when we got to the hospital. Because a lot of people expect this to be a vacation. They want you to do the same amount of work you've been doing for the last 30 years. So that's what the expectation was. Financial risk, zero now. I don't have to put anything on the line, sign anything that they're going to take my house and car and all my savings away because it just didn't work out. Recruitment, they're going to bring them in. They're going to pay them whatever they feel like and you know it doesn't make any difference to me because my salary doesn't go up down or sideways depending upon who they to recruit and how much they have to pay it's a market phenomenon and administrative expense new EMR new employees because you got to have more people in the office your salary doesn't go down it stays exactly the same now I realize and we'll get to that that's kind of a wonderland it doesn't always last forever now practice I had to pay my malpractice that made my salary go down if my premium went up not at the hospital we never did yet convert to a full EHR and we're still talking about that with a hospital because I keep pointing out to them we had a budget to start last month full conversion to EMR and the revenues projected were going to fall by $70,000 per month based on their experiences with other practices and how many patients we were going to be able to see and the number of additional employees and other things we're going to make their expenses rise by 70,000 so it was good it is it still is going to cost us a hundred and forty thousand dollars per month $1,500 I mean per year I'm sorry that's per year 1500 a month in order to avoid a penalty of $20,000 for the year now I am NOT great at arithmetic but I know that doesn't make any sense and I will fight tooth and nail to avoid it as long as I can I know the tide is coming we work for a hospital hospital has to do that but it makes no financial sense now that was at the bottom of the list bundle payment ACO I don't know if I'll ever see that in my lifetime it may happen or may not but that's not my reason for doing this with a hospital so that's why we did it we were losing money rising overhead we couldn't get ancillary income we couldn't compete with other hospitals to recruit people malpractice and all that that's why we did why do we regret it because there's always a balance in this game and one is no control over human resources you are not in charge you are in charge you are an employee you used to be able to make your financial decisions they do have a meeting with us once a month and they still print out the revenue and expense sheet that we used to do and I'll show you something interesting about that but we don't have any control over really making the decisions they're sensitive enough to ask us for things that they think are going to get some people riled up they don't really want to do that so we got a good situation but we're not in charge governance now they let us have the illusion that we're making decisions but we don't quite honestly we don't do the strategic planning we don't do the management we don't do any of those things now if you want to go do those things and be in charge of your life that's a bad deal if you don't want to do those things and you just want to be a doctor it's a good deal if you don't have now we know that if your productivity goes down you have a certain expectation you're going to get called down and you were going to have a little talk about how we're going to adjust your salary so you can't just assume that there's a great unlimited pot of money rolling that institution that they are delighted to pass back to you if hospital profitability goes down then the gravy train is over and they're going to start cutting expenses and it has happened our hospital the first time in 50 years they experienced a quarter with a loss and a nervous as can be the they've adjusted some of the peripheries they haven't gone after the core expenses but who's the big expense salaries and who makes the big salaries inefficiency of hospital practice management yeah afraid of that mistrust of ministration that's key because I told you I knew these guys the administrator been there for 25 years well after 25 years that's an extraordinary long time for administrator last anywhere he's got to have if the state if not the national record but it's not going to last and as soon as he's gone somebody's going to come in and look at what they're giving us and say what what are you doing with all our money so this is sort of what we look like we build 20 million we got 15 million written off because you can't collect it so that that's what we were doing in private practice so we collected 5 million our expenses are 7 million three-quarters of that our salaries and most of that is our salaries so our net income is minus two and a half million dollars where's it come from the hospital where's the hospital's money come from it comes from facility fees right that you are producing now your facility fees are not just producing for you hospital has direct and indirect overhead and the direct overhead is actually kind of trivial compared to what they throw in as indirect overhead which is everything hospital maintenance and all the employees and everything else so when they calculate it that way and say well there wasn't much left after we took all those other expenses that you're responsible for that's a that's a pretty big chunk but anyway last year it was 40 percent this year were subsidized 33 percent our CT group I think is subsidized 55 percent there's a lot of subsidization going on and that is not just with us that's what everybody all these hospitals expect to lose on an average when you're talking about a family practitioner everybody else they just average that say we're gonna lose a hundred fifty thousand dollars a year on this employed doctor and in exchange we're going to get guaranteed hospital facility fees and we're going to take a share of that we're going to give it back so anyway that's this hospital supplement is the same thing in concept that that ancillary income was when you're in private practice now it's just combined into their one financial statement and paid out to you directly so that's what it is we're subsidized by a third this is an interesting slide there's always discussion about what's the value of a neurosurgeon to a hospital we're raking in the money for them they ought to give a lot of it back this is another Merritt Hawkins slide out of the 2012 physician recruiting incentives review now there are two things on here to note first is this their average salary for a neurosurgeon and their surveys of these hospitals now I concede that that's a pretty damn poor response of three percent of hospitals but let's just use it at least as a range that they found first of all you see this 1.6 million I'd always assumed it was 2.5 million that's what I heard back about this yeah it was 2007 2008 AMA reported that well here's what the reports were from their surveys those years these are neurosurgeon produced revenues for a hospital 2.3 and 2002 2.4 2004 2.1 2007 2.8 in 2010 and if it stopped there it looked like it was just going to go up forever but look at the last one I don't know how accurately this reflects everything across the country but if we're all affected by the same things that is cuts in reimbursement that come into facilities as well as to us this could be a real fine that's a 43% fall now let's go back over here who are the physicians that are really profitable to a family practice is for each one of them they account two million dollars they only pay out less than two hundred thousand dollars to that doctor so that's a pretty good deal neurosurgeons if this is true are bringing in a fraction of that seventy percent maybe of it and they're paying out three times as much or more that's not a good deal for a hospital so it's a warning sign this is maybe not going to continue after hospitals begin to see red lines on their revenue and expense sheet every quarter is that the revenue is no that's not net of expenses that that is supposed to be as much as a hospital can account the the the true revenue that came in from the billing you know like I said we got 25% of the building where they're similar to that they have you ever gotten a hospital bill in a hospital and got a bill I've done that a couple of times I've had some some pretty good size surgeries the last surgery I had had a hospital bill that was $35,000 and got paid 10,000 the surgeons bill was a more than the hospital bill he got paid 3,000 so that's it's the actual money as far as I can tell from the survey that was the question the money the revenue not net not net expenses yeah that is true now let me repeat that the comment was that there's not a fair comparison that the primary care doctor actually to get that patient the hospital somebody else puts it in the hospital and produces probably double counting there but they are looking at it as the conduit through which it comes now out of that revenue they're gonna have to pay a specialist to if that specialist is on the salary line but that's true they're not exactly comparable the procedural specialist are the ones that are comparable here so anyway I just wanted to give you a perspective we say we're the best producers for the hospital that's the figure that Merritt Hawkins had in 2012 so what's the value of a neurosurgeon we had five in our group if let's say it was optimistic not 1.6 is 2.5 million we bring in 12.5 million this was the average salary hours just ours is about that actually so that would mean that our salary was 3.35 million total expense projected as I said 7.7 practice subsidy 2.5 that's taken out of part of this is this 2.5 is part of this right here so if this facility made 12.5 million and the practice subsidy has to be subtracted from that so now it's only 10 million 20% of the facility revenue or 30% of if it's only 8 million comes back to you what am I saying I'm saying that you take a big chunk out of their operating expense monies and if you're not producing five or ten times as much for the hospital as your salary that's where the risk comes in and that's where the renegotiation has to come from in the future when the black turns to red and believe me the black will turn to red have to have a more efficient business so when you talk about contribution to margin you can't just say everything hospitals going in their mind they're going to say well that contribution has to account because it was our facility has got to pay for our expenses that's not all that neurosurgeons or other doctors that's the way it works so our salary basis it's an RV you I'm that's what I did before I removed right now I'm not doing so good I hope I can keep it up and I think part of it actually was the bundling most I do is spine bundling change your RV you production so if your target was based on the RV use before bundling and it's a drop 15% and my contract says I got to stay within 15% of what I was doing before I came in I'm riding the edge of the rail so I'm expecting a knock on the door sometime either that I'm going to have to be working Saturdays and Sundays which I just don't feel like doing maybe y'all do dependent on hospital financial success and you as a hospital employed physician or own practice are just as subject to those employer hospital losses as every other employee in the hospital that's your trade-off so what happens when the blush is off the rose and the black turns to red well first of all they consolidate an administrative function so a lot of what was done at our hospital moved to Louisville where there's a centrality I don't know those people anymore I don't see them in the hall I can't call them up on the telephone I don't know who they are they've already started reducing employee benefits they have not started reducing high-cost employee physician salaries yet office expense reductions are trying to do that and when they do that you just have to do some things people used to do for you before and that takes you into the evening are you willing to give that up that time of yours and all that so that's that's that's what it is it's it's a choice and I've run over my time so I'm going to quit I'm sorry to carry on so long I talked too much but anyway I wanted to give you a perspective as honest as I could about what it's like to be there and this is being there after having a great relationship with the hospital administration already the best I think that you could start out with so that's future I'm sorry we'll have to finish up now so if there are any questions or comments we'll be glad to talk to him about up here but thanks so very much for coming and don't forget NREF thank you thank you Jim well the time is about up but if anybody has any questions up Pat you alluded to the same thing Jim did while ago sounds like the party might be over in three to five years no matter what what are your thoughts about that I think the party is going to be over I think at some point the hospital is going to say we can't pay these lost leaders and the revenue they generate isn't sustained sustaining what we do and we may see hospitals giving up neurosurgery and having it only consolidated and in a few hospitals one of the things I had thought about shows I'm not sure that hospitals are going to be the surviving entities there's so much that we don't do in patient now we're all you know hooking our bandwagons on to hospitals but hospitals may not be the entity that survives in the future they may not be that power base if we look at accountable care organizations it's made up of hospitals outpatients and physicians it's possible that physicians may gain momentum and get put back in a position of power and that the hospitals are going to be subservient at that point I mean we see their big hospitals being built in in the Chicago area 450 beds that are 25% filled you don't have people in hospitals like they used to be you have people who have extensive spine surgery one of my friends just had $99,000 worth of spine surgery that was outpatient surgery so she added in the morning went home that night yeah clearly we're talking about the possibility of hospital employment we hadn't said a word about sad the unsingle-payer system which is still hanging out there over all of our heads so there are a lot of other things that may or may not happen in the future but what's your Alex what's your final recommendation to to these folks here we had a number of people are trying to decide what to do right now today I mean are they gonna just go out and in three years it's all gonna be over are they wasting their time going to work for a hospital or what do you think I think Andrea said it best that the answer is it depends I mean decide really what sort of person you are you can you put up with this or is the lack of control autonomy just gonna put you over the edge you're gonna show up one day with an ak-47 you know so you really and the problem is that we dilute ourselves a lot and I'm totally serious you may want to have someone else kind of tell you or even get some executive coaching or someone tags it's amazing sometimes you know the old cliche about lucky is the person whose friends tell you the truth about you yeah you may think I can put up with this and your friends say there's no way in hell you give it up with this so that's one situation is your own personality the other is your options your situation you know maybe you have a couple different options you don't have to go up for hospital if you don't want to on the other hand if you know you your wife insists I'm moving to certain part of the country your parents getting old you need to go to a certain city that may be the only option for you and when you consider your other personal situations it may be the best way to go Andrea what's your final parting advice I would agree I'm often I wear many hats as a recruiter and a consultant and sometimes it's about having those tough conversations to say dr. so-and-so do you really know yourself are you sure you can do something like that you know evaluate those options listen to your interest rate use not just your friends and the people that know you best but consult with a professional that does this for a living and engage with an attorney that can go over your contract this isn't about a fight necessarily it's hopefully in the best terms a collaborative relationship right that's what we're working toward can you collaborate with these people can you trust them do you have that level and what do you do when it doesn't work out those are the questions I would ask myself if I were you well I want you to all join me in thanking this fantastic panel this afternoon I think they've done a great job thank you all and I also finally want to again encourage you all to becoming Cushing level member with MREF so that we can continue to add value to your practice thanks everybody

panel discussion

hospital employee

Pat Wood

physician employment contracts

Andrea Willis

Jim Bean

private practice

autonomy

financial stability

hospital system

employment contracts

compensation

benefits

malpractice insurance

consulting with professionals