Shares in surgical center

[Simba1711]

My boss approached me about investing shares in a surgical center. Wondering if thread members have had experience with this ? What should I look for when looking at the contract ? It is a pretty big investment as I am straight out of training.

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[IMGASMD]

My boss approached me about investing shares in a surgical center. Wondering if thread members have had experience with this ? What should I look for when looking at the contract ? It is a pretty big investment as I am straight out of training.

Wow. That’s pretty weird. Just out of training and getting an investment opportunity? Either they really like you or they really want to screw you.

It may be different from state to state. And I would definitely have someone who has lots of knowledge to review everything.

 

[Simba1711]

Yeah I’d like to think it’s because they like me lol but like you say I’m going to review everything and assume the worst until I verify everything. But to be frank don’t have much experience with this kind of thing neither do my friends.

 

[IMGASMD]

Also are you doing pain ?

 

[AdmiralChz]

In some states this is illegal if you do anesthesia there due to Stark Laws. Not many, but mine is among them.

 

[Simba1711]

I’m anesthesia

 

[Man o War]

Yes.
Is this a new or established center?
If established, ask for the prospectus. They should give this to you if this is a legit opportunity. This will give you everything you need to know about the investment.
Do you have a good financial advisor? They are useful in analyzing these for you, and I would also have an attorney review it.
If this is a good/legit opportunity, banks will throw money at you to buy these shares if you cannot buy them outright. Typically these are done as unsecured loans. Interest rates probably about 5% right now, but that market is so volatile you should shop around.
You should also consult with a CPA, as you likely will need to pay quarterly taxes for distributions, but you get a host of tax benefits most of the time so they need to run a projection for you.
This will seem like a massive up front PITA and investment for you if you’re fresh out of training, but it pays for itself and more than some if it’s legit.

 

[Simba1711]

its a new facility. Thank you for your advice.

 

[Man o War]

its a new facility. Thank you for your advice.

You should still be able to get a prospectus for a new facility, it will just not have any historical info on the operations or distributions obviously.
This is higher risk since it’s not established, but the shares should be significantly cheaper due to that as well.

 

[IMGASMD]

Can you talk little bit about Stark Law and/or how does surgeons get away with it?

 

[Tony C anesthesia]

My boss approached me about investing shares in a surgical center. Wondering if thread members have had experience with this ? What should I look for when looking at the contract ? It is a pretty big investment as I am straight out of training.

Surgery centers are in deep $h..t trouble these days. Keep you money away. It's a big NO.

 

[ChiDO]

If surgery centers are run appropriately, they are a great investment opportunity. Ours is extremely profitable.

 

[aneftp]

Usually they will offer u a token 1% cause they are violating stark laws with anesthesia company model. So by offering the 1% it makes it legal for u to “own” the anesthesia portion even though 99% of the profits from anesthesia flow back to the surgeons and Gi docs.

been there. Done that.

 

[sevo00]

In some states this is illegal if you do anesthesia there due to Stark Laws. Not many, but mine is among them.

how is it illegal for anesthesia and not illegal for surgeons? they are the ones actually bringing the cases to the center, if anything the stark laws should apply more to them than to anesthesia

 

[sevo00]

Usually they will offer u a token 1% cause they are violating stark laws with anesthesia company model. So by offering the 1% it makes it legal for u to “own” the anesthesia portion even though 99% of the profits from anesthesia flow back to the surgeons and Gi docs.

been there. Done that.

that's actually illegal and you should report it. Surgeons and GI docs are not allowed to be paid for the anesthesia services. If you don't feel comfortable reporting it then please DM me I would be more than happy to.

 

[coffeebythelake]

that's actually illegal and you should report it. Surgeons and GI docs are not allowed to be paid for the anesthesia services. If you don't feel comfortable reporting it then please DM me I would be more than happy to.

I'm sure there a easy legal loopholes around that

 

[deleted126335]

My boss approached me about investing shares in a surgical center. Wondering if thread members have had experience with this ? What should I look for when looking at the contract ? It is a pretty big investment as I am straight out of training.

I have ZERO experience with this, but...unless there is some personal connection, I am highly suspicious that they would offer a brand new grad who presumably they don’t know well at all personally or clinically a solid opportunity.

 

[Man o War]

Surgery centers are in deep $h..t trouble these days. Keep you money away. It's a big NO.

Not true. Best investment in my entire portfolio return wise.
But proceed with caution, this would be true for a poorly run one.

 

[deleted162650]

In some states this is illegal if you do anesthesia there due to Stark Laws. Not many, but mine is among them.

I think you are confusing a few different things. There is no way a law can prevent an anesthesiologist from owning shares and providing professional services but not a surgeon. Please reference the state law you are referring to.

Stark laws have to do with the “company model” and kickbacks which are distinct issues from surgery center ownership.

 

[pjl]

I think you are confusing a few different things. There is no way a law can prevent an anesthesiologist from owning shares and providing professional services but not a surgeon. Please reference the state law you are referring to.

Stark laws have to do with the “company model” and kickbacks which are distinct issues from surgery center ownership.

Please don’t take any advice about the stark laws from anyone here. Hire a competent lawyer. It’s a couple hundred/thousand bucks now and I would expect your buy in is potentially in the hundreds of thousands range.
There are legitimate and illegitimate ways for us to own a surgery center, just make sure it clears with your lawyer.

In my situation, I just have to inform the patient of my ownership, same as the surgeon. We accomplish this through the magic of signs and paperwork, nearly zero effort unless someone asks questions, which they are welcome to do.

My hospital admin buddies openly joke about just using the terms “stark law violation” and “compliance issues” when talking to physicians because it confuses us and makes it easier for them to negotiate. I have watched them drop other specialists salaries by 25% due to “compliance issues.”

My surg center ownership has returned ~20% average annually (15-35) over the past almost 10 years. That is a return I am very happy with. This year it is ~15% lower earnings than last year due to covid, but making up ground.

A bad surg center can screw you though, and it is hard to evaluate fresh out of training. You probably should get someone experienced to take a look, and see what future buying opportunities would be.

Ideally you could buy in for a “share” or low amount now and put more in once you establish yourself financially (and see that there is success). Some ownership should give you access to books and will definitely help with politics.

 

[AdmiralChz]

I think you are confusing a few different things. There is no way a law can prevent an anesthesiologist from owning shares and providing professional services but not a surgeon. Please reference the state law you are referring to.

Stark laws have to do with the “company model” and kickbacks which are distinct issues from surgery center ownership.

Things are a little different here in the east. I’m considered an “employee” or “contractor” and as such cannot own a share. This is different than a surgeon who has another title. I’ll try to find the exact code, but I’m not a lawyer. Just know what has been told to us in the past. We staff 4 ASCs and have during the boom times of the 1990s, why wouldn’t we have bought in then? Answer - lawyers.

Anyway, surgery centers are rough business these days. You get less reimbursement as a facility than a hospital and equipment procurement costs have skyrocketed over the past 5 years. Testing everyone for COVID (indefinitely) isn’t cheap either. Even if I could buy in, doubtful I would. I am sure others on this board feel otherwise, but then again many are still pushing bitcoin and blockchain so...

 

[gasdoc77]

Any anesthesiologist that has an opportunity to buy in to a surgery center should very strongly consider it. In addition to potential returns, it may very well be the single lifeline that allows you a seat at the table and may keep you and/or your group insulated against the predatory takeover of an AMC or another outside entity. Only you can assess the significant value that that has. Keep in mind that many offering advice on here may be working for (or a part of) said AMC's.
And also the whole Stark thing is overblown. That word constantly gets thrown around and used to push agendas. It gets interpreted very differently depending on whose lawyer looks at it and what their motive is. As mentioned above, funny how the surgeons aren't scared (and they definitely could be interpreted as referring patients to themselves ie violating Stark!).

 

[pjl]

Things are a little different here in the east. I’m considered an “employee” or “contractor” and as such cannot own a share. This is different than a surgeon who has another title. I’ll try to find the exact code, but I’m not a lawyer. Just know what has been told to us in the past. We staff 4 ASCs and have during the boom times of the 1990s, why wouldn’t we have bought in then? Answer - lawyers.

Anyway, surgery centers are rough business these days. You get less reimbursement as a facility than a hospital and equipment procurement costs have skyrocketed over the past 5 years. Testing everyone for COVID (indefinitely) isn’t cheap either. Even if I could buy in, doubtful I would. I am sure others on this board feel otherwise, but then again many are still pushing bitcoin and blockchain so...

I am not an “employee” or “contractor,” I am an “owner” or “partner” just like the surgeons.

 

[leaverus]

Damn, I need someone to offer me something like this.

 

[Man o War]

Any anesthesiologist that has an opportunity to buy in to a surgery center should very strongly consider it. In addition to potential returns, it may very well be the single lifeline that allows you a seat at the table and may keep you and/or your group insulated against the predatory takeover of an AMC or another outside entity. Only you can assess the significant value that that has. Keep in mind that many offering advice on here may be working for (or a part of) said AMC's.
And also the whole Stark thing is overblown. That word constantly gets thrown around and used to push agendas. It gets interpreted very differently depending on whose lawyer looks at it and what their motive is. As mentioned above, funny how the surgeons aren't scared (and they definitely could be interpreted as referring patients to themselves ie violating Stark!).

We had an ortho on staff once who owned shares at 3 different centers. Since they all required him to bring a certain share of business we only saw him at the hospital when he was on call and had to come in for that.
None of these guys/gals are worried about Stark, and I’ve never known a single doc who owns ASC shares get in trouble on that basis.

 

[yossarian22]

The whole stark issue usually refers to the profiting/kickbacks if you refer a patient for a service, then profit off of that referral. Family docs/internal medicine docs cannot profit from their referrals to GI centers/surgical centers etc . If you have ownership in a center and you perform procedures there, it is legal to profit off that service if you perform it personally.
GI centers violate “stark laws” on a regular basis by setting up company model anesthesia. A quick google search can get you up to speed on this activity (OIG 12-06). The ASA hasn’t published anything on it in years and seems like it won’t change anytime soon.
OP, cant hurt to investigate this offer a little more. Like everything in life there is risk/reward. Don’t use any lawyers that they recommend.

 

[chocomorsel]

I’m anesthesia

Don’t ever say this out loud.
Please. In fact try not to type it.

 

[2Fast2Des]

I’m anesthesia

Which type? Volatile? Tiva? Mac? GA?

 

[sevoflurane]

I was offered to be a shareholder in a surgery center a few years ago. Some of my partners took it, some didn’t. Some are on the board now, but covid put a stop to operations for a few months. Could be good, especially if bought out by a hospital system (has happened 2 times in my area in recent history).