USACS at it Again

[alphaholic06]

Out Of The ER, Into The Street

Enraged by Wall Street’s takeover of their profession, emergency physicians are rising up and speaking out.

www.levernews.com

---

Members don't see this ad.

 

[Dr Mantis Toboggan]

If Apollo really buys Envision, that’s the endgame no?

 

[WildEMDoc]

If Apollo really buys Envision, that’s the endgame no?

Absolutely terrifying honestly. Didn't know that was even looming on the table.

Random question but Apollo Global Management owns ApolloMD too right?

If TeamHealth was to buy one of the other remaining corporate groups (SCP/APP). We'd literally be left with 3 groups controlling ?75%? of the emergency departments in the country.

Will it all lead to a government intervention to break them up? Not sure how this all ends but not looking good.

 

[bravotwozero]

If Apollo really buys Envision, that’s the endgame no?

Wait what? Isnt Apollo a tiny group compared to Envision? Wouldn’t the opposite scenario be more likely?

 

[Dr Mantis Toboggan]

Wait what? Isnt Apollo a tiny group compared to Envision? Wouldn’t the opposite scenario be more likely?

I believe that Apollo MD is different than the Apollo private equity behemoth.

 

[turkeyjerky]

I believe that Apollo MD is different than the Apollo private equity behemoth.

Yeah, Apollo MD has nothing to do with Apollo global management. I believe they have a different PE partner.

Love that description of D-Bag: "the boss of an Ohio ER fiefdom".

 

[southerndoc]

ApolloMD is not owned by a private equity and we have nothing to do with Apollo Global Management.

ApolloMD is physician owned.

 

[hundreddaysoff]

If Apollo really buys Envision, that’s the endgame no?

Endgame how?

 

[hundreddaysoff]

I read the whole thing. Here's the money shot:

While doctors may technically own USACS, the majority of its profits are controlled by the half-trillion dollar private equity firm Apollo Global Management. According to the USACS statement provided to The Lever, “Apollo is a supportive lender to USACS and in 2021 provided financing to enable our physician-led buyout, giving doctors full control of our business when our former capital partner sold their minority equity stake… Apollo is a supportive lender, but has no right to exert operational control at USACS.”

But that financing means that barring some miracle, Apollo likely controls the company’s destiny — since that capital came with what appear to be virtually impossible terms.

In several deals it called “a form of hybrid capital,” Apollo agreed to buy a total of $711 million in preferred USACS stock that would convert into something akin to high-yield debt in five years if management couldn’t come up with the funds to buy it back.

A USACS employee and shareholder told The Lever they have been repeatedly told by corporate representatives that the “interest rate” on Apollo’s investment is 10.5 percent. That means that every year, USACS needs to pay its investors at least $75 million in dividends, which is roughly half of what the Moody’s credit agency estimates the company earns every year. Those payments would likely be a lot easier to manage if USACS didn’t have an additional $725 million in old-fashioned debt, taking another $47 million or so in annual interest expenses out of its coffers.

It’s possible that USACS will pull off an earnings surprise: Its numbers were good enough in 2021 that USACS spent $132 million on dividends, transactions, and share buybacks in the third quarter, according to Moody’s. But Moody’s, for one, described the terms of the Apollo deal as a veritable guarantee that USACS’ financial structure will experience a “material change” within the next five years — which is bond-lawyer-speak for, “physician owners are going to get wiped out.”

Translation: During the VEP merger last year, USACS and VEP admin were being very misleading during all those Zooms to VEP shareholders and other docs when they implied (to my ears at least) that USACS is no longer controlled by private equity.

USACS still needs to find $711 million to effectively repay the PE giant Apollo in 2026. If they can't, USACS "shareholders," ie us, may well be personally on the hook for that $711 million, on top of what we've already paid in for our fiat "shares".

Even if it weren't for all the other USACS chicanery that has been occurring at baseline, this fact of math is at the root of all the midlevel layoffs and other new troubles since the merger.

So, so, so glad I'm out of this whole mess. Apollo can have my ~$40k in 83(b) prepaid tax money. They will not take more of my money and they will never take my soul.

 

[DocEspana]

If Apollo really buys Envision, that’s the endgame no?

Envision has been not-so-secretly planning to split itself into two. Various news-sources have reported on the fact that, even if Envision won't formally confirm it: anonymous 'leaks' match corporate restructuring moves that are publicly visible. Plan appears to be to split the company in two between profitable and unprofitable hospitals and sell the unprofitable ones off to whomever will pay the highest for those bad assets. Because these private equity groups make their money if the company succeeds but also make money if the company fails - as shown in USACS. They bail the company out for massive amounts of money with the deal that later on the piper will get paid and if it has to sell off the hospitals or bankrupt the whole company to do so - it will let that happen.

But this group apollo wont buy all of envision only part, but envision will likely shrink by 40-ish percent one day and suddenly someone else will be holding the bag on that 40% that 'left' the company.

 

[turkeyjerky]

ApolloMD is not owned by a private equity and we have nothing to do with Apollo Global Management.

ApolloMD is physician owned.

ValorBridge Partners?

 

[hundreddaysoff]

Envision has been not-so-secretly planning to split itself into two. Various news-sources have reported on the fact that, even if Envision won't formally confirm it: anonymous 'leaks' match corporate restructuring moves that are publicly visible. Plan appears to be to split the company in two between profitable and unprofitable hospitals and sell the unprofitable ones off to whomever will pay the highest for those bad assets. Because these private equity groups make their money if the company succeeds but also make money if the company fails - as shown in USACS. They bail the company out for massive amounts of money with the deal that later on the piper will get paid and if it has to sell off the hospitals or bankrupt the whole company to do so - it will let that happen.

But this group apollo wont buy all of envision only part, but envision will likely shrink by 40-ish percent one day and suddenly someone else will be holding the bag on that 40% that 'left' the company.

I think I understand the "heads Envision wins" part re keeping the profitable contracts. I'm struggling with the "tails PE wins".

If I understand correctly, the start of the "tails PE wins" part would be Envision selling, eg, their unprofitable BFE Medical Center ("BFE") contract to PE, eg Apollo or Blackrock, which PE buys with money that PE borrowed from, uh, somewhere... ultimately taxpayers' future earnings basically?

PE then writes BFE a long, arcane contract in which BFE grants PE "equity", which at the time looks to BFE like basically a part of BFE's future earnings, if any. This makes PE look like heroes to the outside world who will "turn around a failing ER" because there is ¡no debt no chains YAY CAPITALISM!

Except... in that arcane contract that no one actually bothered to read because they were too busy eating the delicious sammiches that PE bought them at the presigning party, PE actually inserted a poison pill super-secret weaselly clause that says this equity is actually just like debt, in that if a random huge amount of money x that PE chose is not paid to PE by BFE within n years, the x amount of equity gets converted to x amount of debt.

And then of course BFE can't pay the equity within n years, because they aren't profitable and never will be because it's BFE, and now BFE is in chains to PE.

Am I understanding this right?

If so, what happens next? Where would the money ultimately come from to pay PE, if the deal didn't include dumping the "equity" on the gullible docs (like USACS) and the BFE contract includes no real assets (like any ER contract)? Who is the greatest fool?

Would PE depend in that case on the Fed put, if that's still a thing? Ie, someone needs to staff the ER at BFE, or else sick BFers have no ER and inappropriately suffer and die, so the government ultimately buys the contract from PE? Thus completing the circle of PE looting from taxpayers?

 

[BoardingDoc]

I think I understand the "heads Envision wins" part re keeping the profitable contracts. I'm struggling with the "tails PE wins".

If I understand correctly, the start of the "tails PE wins" part would be Envision selling, eg, their unprofitable BFE Medical Center ("BFE") contract to PE, eg Apollo or Blackrock, which PE buys with money that PE borrowed from, uh, somewhere... ultimately taxpayers' future earnings basically?

PE then writes BFE a long, arcane contract in which BFE grants PE "equity", which at the time looks to BFE like basically a part of BFE's future earnings, if any. This makes PE look like heroes to the outside world who will "turn around a failing ER" because there is ¡no debt no chains YAY CAPITALISM!

Except... in that arcane contract that no one actually bothered to read because they were too busy eating the delicious sammiches that PE bought them at the presigning party, PE actually inserted a poison pill that says this equity is actually just like debt, in that if a random huge amount of money x that PE chose is not paid to PE by BFE within n years, the x amount of equity gets converted to x amount of debt.

And then of course BFE can't pay the equity within n years, because they aren't profitable and never will be because it's BFE, and now BFE is in chains to PE.

Am I understanding this right?

If so, what happens next? Where would the money ultimately come from to pay PE, if the deal didn't include dumping the "equity" on the gullible docs (like USACS) and the BFE contract includes no real assets (like any ER contract)? Who is the greatest fool?

Would PE depend in that case on the Fed put, if that's still a thing? Ie, someone needs to staff the ER at BFE, or else sick BFers have no ER and inappropriately suffer and die, so the government ultimately buys the contract from PE? Thus completing the circle of PE looting from taxpayers?

The conversion to debt ensures they gets paid. To oversimplify it:

A: Success. Stock value increases, PE company sells stock at a gain and is happy.
B: Failure. Stock is converted into preferential debt as a secured creditor. Envision either cobbles together the money to pay PE (PE wins) or Envision files for bankruptcy and is forced to liquidate assets in order to pay creditors. As a secured creditor, PE is the first to get paid. PE wins. The only scenario where PE loses here is if Envision is so grossly mismanaged that they not only fail to become profitable, but they drive all of their remaining asset values so far into the ground that they exceed the debt that is owed to PE (unlikely).

As for all the patients in BFE, they still go to their ER in BFE. That ER is simply no longer run by Envision. The hospital either runs it itself or hires another group to do so. Envision is still holding all the debt to PE in this case. BFE is spun off, goes broke and is broken apart and sold at a loss.

As a slight tangent: you described this stock to debt conversion as a "poison pill." A poison pill is actually a specific financial strategy to fend off hostile takeovers. It's somewhat apropos as it's what Twitter just employed to prevent Musk from taking over, however, It doesn't apply here.

 

[hundreddaysoff]

B: Failure. Stock is converted into preferential debt as a secured creditor. Envision either cobbles together the money to pay PE (PE wins) or Envision files for bankruptcy and is forced to liquidate assets in order to pay creditors. As a secured creditor, PE is the first to get paid. PE wins. The only scenario where PE loses here is if Envision is so grossly mismanaged that they not only fail to become profitable, but they drive all of their remaining asset values so far into the ground that they exceed the debt that is owed to PE (unlikely).

Bolded is the part I fail to understand.

I thought the whole point is that Envision doesn't own the unprofitable parts anymore because they sold them to PE. Envision kept their profitable parts and won ("heads").

Suppose we call the unprofitable parts "Enblinden" and they fail to cobble together the money to pay PE. So "Enblinden files for bankruptcy and is forced to liquidate assets in order to pay creditors."

I thought the whole point is that Enblinden only owns BFEs, ie pieces of paper that give them a right to the future earnings of BFE's ER. But by definition there are no future earnings, ie all the BFEs are unprofitable; otherwise Envision wouldn't have spun them off.

So, what assets does Enblinden actually have with which to pay creditors? Ie, how does PE expect to make any money at all in this case, which I consider the most likely, unless Enblinden goes full USACS and fleeces new docs to pay PE?

Thanks for the clarification that "poison pill" is a technical term. Is there another preferred phrase in Financeland to describe this occult equity->debt conversion maneuver? "Lying by omission" is the first alternate phrase that comes to my unwashed mind.

 

[Boatswain2PA]

The only scenario where PE loses here is if Envision is so grossly mismanaged that they not only fail to become profitable, but they drive all of their remaining asset values so far into the ground that they exceed the debt that is owed to PE (unlikely).

What kind of "assets" does a staffing company have to sell off?

 

[southerndoc]

ValorBridge Partners?

No, we aren't owned by ValorBridge. There is a relationship with them, but they do not own ApolloMD. Chris Durham was with ApolloMD when he founded ValorBridge. They still maintain investments in ApolloMD, but ApolloMD remains a majority physician-owned company (not sham stocks like some CMGs have done).

 

[BoardingDoc]

Bolded is the part I fail to understand.

I thought the whole point is that Envision doesn't own the unprofitable parts anymore because they sold them to PE. Envision kept their profitable parts and won ("heads").

Suppose we call the unprofitable parts "Enblinden" and they fail to cobble together the money to pay PE. So "Enblinden files for bankruptcy and is forced to liquidate assets in order to pay creditors."

I thought the whole point is that Enblinden only owns BFEs, ie pieces of paper that give them a right to the future earnings of BFE's ER. But by definition there are no future earnings, ie all the BFEs are unprofitable; otherwise Envision wouldn't have spun them off.

So, what assets does Enblinden actually have with which to pay creditors? Ie, how does PE expect to make any money at all in this case, which I consider the most likely, unless Enblinden goes full USACS and fleeces new docs to pay PE?

Thanks for the clarification that "poison pill" is a technical term. Is there another preferred phrase in Financeland to describe this occult equity->debt conversion maneuver? "Lying by omission" is the first alternate phrase that comes to my unwashed mind.

So we're talking about slightly different things here. I was referring to KKR's general strategy with Envision as a whole. Not necessarily with this spin off, though if Envision does split into 2, I suspect that KKR will probably use the opportunity to eject from both Envision and the spin-off company seeing as they're right on schedule for the usual 5 yr PE healthcare cycle.

There are a lot of reasons why a PE company would buy this spin-off, though it would obviously depend on the details. Here's an interesting (if very lengthy) paper on the topic.

https://www.cepr.net/wp-content/uploads/2020/03/WP_118-Appelbaum-and-Batt.pdf

 

[EctopicFetus]

ApolloMD is not owned by a private equity and we have nothing to do with Apollo Global Management.

ApolloMD is physician owned.

ApolloMD is as physician owned as apple and target.

Team

OUR TEAM Christopher Durham Chris successfully co-founded ApolloMD with Gerald Bortolazzo, MD to support the clinical operations of a rapidly growing clinician group. He continues to serve in a...

www.valorbridge.com

 

[DocEspana]

I think I understand the "heads Envision wins" part re keeping the profitable contracts. I'm struggling with the "tails PE wins".

If I understand correctly, the start of the "tails PE wins" part would be Envision selling, eg, their unprofitable BFE Medical Center ("BFE") contract to PE, eg Apollo or Blackrock, which PE buys with money that PE borrowed from, uh, somewhere... ultimately taxpayers' future earnings basically?

PE then writes BFE a long, arcane contract in which BFE grants PE "equity", which at the time looks to BFE like basically a part of BFE's future earnings, if any. This makes PE look like heroes to the outside world who will "turn around a failing ER" because there is ¡no debt no chains YAY CAPITALISM!

Except... in that arcane contract that no one actually bothered to read because they were too busy eating the delicious sammiches that PE bought them at the presigning party, PE actually inserted a poison pill super-secret weaselly clause that says this equity is actually just like debt, in that if a random huge amount of money x that PE chose is not paid to PE by BFE within n years, the x amount of equity gets converted to x amount of debt.

And then of course BFE can't pay the equity within n years, because they aren't profitable and never will be because it's BFE, and now BFE is in chains to PE.

Am I understanding this right?

If so, what happens next? Where would the money ultimately come from to pay PE, if the deal didn't include dumping the "equity" on the gullible docs (like USACS) and the BFE contract includes no real assets (like any ER contract)? Who is the greatest fool?

Would PE depend in that case on the Fed put, if that's still a thing? Ie, someone needs to staff the ER at BFE, or else sick BFers have no ER and inappropriately suffer and die, so the government ultimately buys the contract from PE? Thus completing the circle of PE looting from taxpayers?

@BoardingDoc got it right, though I explain it even more simply. They took a bet that these failing hospitals won't get COMPLETELY broke and dissolve before the contract is up. If they make money, these companies cash out at a profit. If they don't make money the companies utilize various mechanisms to force the hospitals to sell off any asset they have left, give away any liquidity they do have, and turn a bunch of the hospitals into real estate property that can be worth more than a failing hospital (often this actually leads to the local community "buying off" the original company to prevent closure). Sometimes this looks like black rock selling the same failing system to Apollo who later sells the same failing system to someone else ad infinitum as long as someone has the liquidity to bail them out one more time and impose even more draconian penalities on the existing company.

The only way they lose is if the whole system goes underwater and fully closes under the weight of it's own debt before the bill comes due - which is why these companies force cost cutting measures early in the process, as that's the only way they lose.

 

[DocEspana]

What kind of "assets" does a staffing company have to sell off?

Envision (enblinden?) made this entire system extra efficient by partnering with the hospitals in a way that makes them part owners of the hospital (only part). It allows them to have some access to hospital assets in the situation where they tank. I should have clarified.

But also, most of this is funny money changing hands because no one wants to be associated with the company when they finally don't have assets to pay off stuff, so they accept debt to pay off debt and buy new debt on credit to fulfill demands of a contract. Think of it like you're a high ranking Vice president. You're getting paid a big check every month to keep doing whatever you're doing. Even if the company is grossly underwater, if there is some sort of accounting trick you can do you do that accounting trick to keep the company liquid and keep your check coming in. It doesn't matter if it f**** the company worse, your paycheck is guaranteed and you don't intend to retire in the next few years. If your retirement date is 4 years away and blackrock says they want to get paid in 6, you okay that deal.

 

[Kryptocoin]

So USACS has a potential debt of 1.4b in 5 years at 10% interest with an annual revenue of 150M. So who signed off on this deal?

 

[bravotwozero]

So USACS has a potential debt of 1.4b in 5 years at 10% interest with an annual revenue of 150M. So who signed off on this deal?

I suspect someone from inside USACS who got his/her pockets nicely lined by the PE group to sign off on the deal.

 

[Tenk]

Sucks to be anyone with USACS. You’re beyond screwed. That’s what these PE groups do, they devour. They don’t even look at us as humans, just pawns on a chess board.

 

[southerndoc]

ApolloMD is as physician owned as apple and target.

Team

OUR TEAM Christopher Durham Chris successfully co-founded ApolloMD with Gerald Bortolazzo, MD to support the clinical operations of a rapidly growing clinician group. He continues to serve in a...

www.valorbridge.com

I'm not arguing in a forum for somebody who has no direct knowledge of ApolloMD operations.

 

[namethatsmell]

I recall being offered USACS shares after they ate a group I worked with prn. They tried to pressure me to go full-time. Told them to keep their shares and pay me more. And they actually did.

As I watched them burn this site to the ground in a matter of months, they had the gaul to imply things were now "better."

In hindsight, it's impressive how much they enhanced the moral injury that already plagues many EM docs.

They, and the other corps like them, are the actual embodiment of "it could always be worse."

 

[hundreddaysoff]

Envision (enblinden?) made this entire system extra efficient by partnering with the hospitals in a way that makes them part owners of the hospital (only part). It allows them to have some access to hospital assets in the situation where they tank. I should have clarified.

Ah, this was the huge important thing that I was missing. So, "BFE" really does mean part of BFE and not just the paper BFE ER contract, and PE will have its claws in some real hospital assets to sell if they are unlucky and happen to be holding the hot potato before their C-suite turns over again.

Thank you for explaining this in simple terms. Been trying to understand this PE stuff half-arsedly for a while now.

As you were telling the story in your post immediately prior, the old movie played in my head of a mustachioed villain in a tophat kicking the kids out of the orphanage so he could sell the whole thing off to real estate developers.

I haven't even told the full story yet of USACS' chicanery during the surprise VEP merger in CA last year. Maybe I will after I'm out.

And as I've said before, my understanding is that it's not just the healthcare industry where PE is doing this stuff.

Boardingdoc, I will eventually read that big paper you linked, as I'm genuinely interested in how PE rationalizes these things. But I suspect my conclusion will not change:

BITFD

 

[EctopicFetus]

I suspect someone from inside USACS who got his/her pockets nicely lined by the PE group to sign off on the deal.

Their revenue before vep and Alteon was just under $1b. I think about $1,5b now.

 

[EctopicFetus]

I'm not arguing in a forum for somebody who has no direct knowledge of ApolloMD operations.

No problem lol.

 

[hundreddaysoff]

Their revenue before vep and Alteon was just under $1b. I think about $1,5b now.

That's a lot of revenue.

(1) Will they reasonably have enough profit (?correct term) out of that $1.5B revenue to pay off the $711M not-a-debt to Apollo?

If so, (2) will USACS admin plausibly actually do so? Or (3) can they choose to be further weasels and essentially lie and say "we don't have the cash, sorry!" and take it out of their docs' hides while they shift the actual profit to their secret holding company?

If the answers to (1) and (2) are both "yes", then part of OP's story is actually just insinuation and much ado about nothing, no? ("Wall Of Worry" or "Chicken Little-ing" might be applicable media-related terms in that case?)

Not saying I don't dislike USACS anyway. I just want to understand the truth here, if there is any.

 

[Kryptocoin]

Their revenue before vep and Alteon was just under $1b. I think about $1,5b now.

Those numbers vastly different from the ones implied in the article above. Unless I missed something.....

 

[EctopicFetus]

Those numbers vastly different from the ones implied in the article above. Unless I missed something.....

I trust moodys. “its pro forma revenues (including Alteon acquisition) are approximately $1.5 billion.”

U.S. Acute Care Solutions, LLC -- Moody's affirms U.S. Acute Care Solutions, LLC's B2 CFR, outlook stable

Rating Action: Moody's affirms U.S. Acute Care Solutions, LLC's B2 CFR, outlook stableGlobal Credit Research - 19 Jan 2022New York, January 19, 2022 -- Moody's Investors Service ("Moody's") affirmed U.S. Acute Care Solutions, LLC's ("USACS") B2 Corporate Family Rating, B2-PD Probability of...

finance.yahoo.com

Issue is their profit is in the $100-150m range.

Interest will be $80m.

If you read the article you will see they have to pay the debt off by 2026 or Apollo basically controls the company.

In reality I would expect them to refinance their debt. There is no chance they can pay it back. They can only refinance it.

It wasn’t usacs preference to take on debt. Wcas wanted out and no one wanted their stock. Preferred stock (favorable debt) which will allow them control and diminishes their risk. It’s basically the crappiest terms you can get as a company. Like borrowing from a loan shark.

 

[hundreddaysoff]

Issue is their profit is in the $100-150m range.

Interest will be $80m.

If you read the article you will see they have to pay the debt off by 2026 or Apollo basically controls the company.

In reality I would expect them to refinance their debt. There is no chance they can pay it back. They can only refinance it.

It wasn’t usacs preference to take on debt. Wcas wanted out and no one wanted their stock. Preferred stock (favorable debt) which will allow them control and diminishes their risk. It’s basically the crappiest terms you can get as a company. Like borrowing from a loan shark.

Why did no one want their stock? Does PE see this $100--150M profit as particularly low relative to other CMGs?

Or does PE have some other reason not to have faith in them relative to other CMGs?

 

[EctopicFetus]

Risk / reward. Pe is shying away from the CMGs. Note app and envision are also having issues. mind the $100m is before they pay $70m+ in interest. Pe looks for a return of 2.5 x in a decade for their funds. No reason to aim for less. Do you think the actual free cash will go up that much? Either have to cut costs (salaries, MLPs instead of docs) raise revenue at no cost (win contracts) or beat up insurers (better contracts in a setting of the nsa). I think they can and will cut costs. I have spoken to app and this is their plan. Drive pay down asap. It was then in their offering slide deck.
i don’t see USACS having a net gain in contracts they don’t have to pay for and insurers are eating their lunch.

 

[Boatswain2PA]

I think they can and will cut costs. I have spoken to app and this is their plan. Drive pay down asap. It was then in their offering slide deck.

Worked for VEP for years, USACS just cut our pay by 18% (in addition to cut in benefits from when the "merger" happened).

 

[Apollyon]

And I totally disagree with @southerndoc 's "disagree" response, as that does NOT give the same sense as projected. His is morally supportive, but, looks oppositional.

 

[hundreddaysoff]

Worked for VEP for years, USACS just cut our pay by 18% (in addition to cut in benefits from when the "merger" happened).

You were in the VEP merger cohort too, huh?

18% sounds about right. I probably did the math differently than you, but the way they presented it made it real hard to compare apples to apples.

Did you choose the W-2 $20/h straight-up pay cut or the 1099 pay-our-taxes-now-serf 83(b) option?

I chose the latter, 1099. What actually hurt the most, believe it or not, was not the initial ~$40k tax hit (had to borrow money from family to pay that one), but rather all the time I've wasted dealing with the extra tax forms and other paperwork for this silly S-corp they forced me to form. And all the wasted time researching the original W-2/1099 decision itself, which I suspect turns out not to matter either way in terms of take-home pay.

Especially if all the USACS shareholders get reamed, again, in 2026 by Apollo.

And in the past 3 months they cut my pay by another ~$10/h on top of the first hit by implementing productivity-based pay. Their math on this was not a good deal for me as a nocturnist at a single-coverage rural shop with pretty low census at baseline.

Did you know Steve and Dom had been talking about this deal for years, at least since USACS was EMP, just biding their time? At least, that's what they told us in their presentations. I imagine they planned this merger to coincide with the turnover of USACS' C-suite.

 

[alphaholic06]

Guess, I’ve been out of the loop. Didn’t realize that VEP and USUCK merged.

 

[hundreddaysoff]

Guess, I’ve been out of the loop. Didn’t realize that VEP and USUCK merged.

In retrospect, I wish I had never learned about VEP either. USACS, I knew, because they had already invaded my hometown and driven down pay by $25/h around the time I finished residency. (And subsequently bailed and were replaced by Envision at the same lower pay rates.)

Financially, would've made more sense to stick with my $250/h TH job in TX. At least they were relatively transparent about their degree of looting.

 

[Boatswain2PA]

Did you choose the W-2 $20/h straight-up pay cut or the 1099 pay-our-taxes-now-serf 83(b) option?

I'm a PA. VEP gave us an average pay with a decent bonus available for RVU bonuses. USACS kept us at our historical pay+RVU level for a while but just changed it. Under USACS it seems near impossible to get any bonus.

 

[hundreddaysoff]

I'm a PA. VEP gave us $70/hr with an RVU bonus that a few of us could get up to $85/hr. USUKS kept us at our historical level ($85) for a few months as billing shifted over but then suddenly I can't make much more than $70/hr anymore.

For some reason I thought you had gone to med school after the PA.

I guess you were as surprised by this merger as I was. I joined about 6 months before, and I figured VEP was there to stay and there were no unknown unknowns and I was taking a moderate but budget-able pay cut in exchange for the improved lifestyle in CA.

But, I guess the thing about unknown unknowns is you can't really know about them. You know?

I'm sorry to hear about your big pay cut. It's an awful situation, and I guess it's all relative. USACS just straight-up laid off all our PAs without much warning after the merger. They weren't necessarily wrong, from an MBA jerkarse point of view... our volume wasn't quite enough to support more than straight-up single coverage. But, the PA layoffs have caused a bit of drama at my shop as a second-order effect.

 

[Boatswain2PA]

For some reason I thought you had gone to med school after the PA.

I guess you were as surprised by this merger as I was. I joined about 6 months before, and I figured VEP was there to stay and there were no unknown unknowns. But, I guess the thing about unknown unknowns is you can't really know about them. You know?

I'm sorry to hear about your big pay cut. It's an awful situation, and I guess it's all relative. USACS just straight-up laid off our PAs without much warning after the merger. Has caused a bit of drama at my shop.

Nope, too old for that.

I'm moving on to better, much higher paying job. Will stay part time at this shop because it is a great team there. I would do damn near anything for the docs I work with.

Docs here are not happy with usacs either. I don't think there is any way they could let go all the midlevels, the docs would revolt and quit.

Unfortunately there are hundreds of new NP graduates a year in this area driving out rates down.

 

[namethatsmell]

At the risk of beating the same drum over and over...anybody looking for a job needs to find a hospital-employed/VA/Kaiser/DoD/IHS gig. Sure, a genuine unicorn sdg that doesn't have a predatory pre-partner track is the most ideal -- if you can find it.

And if you're not currently looking for another gig but still work for a CMG, you need to be looking at one of the above places. Even if it's just prn to start. Get your foot in the door however you can.

 

[hundreddaysoff]

At the risk of beating the same drum over and over...anybody looking for a job needs to find a hospital-employed/VA/Kaiser/DoD/IHS gig. Sure, a genuine unicorn sdg that doesn't have a predatory pre-partner track is the most ideal -- if you can find it.

And if you're not currently looking for another gig but still work for a CMG, you need to be looking at one of the above places. Even if it's just prn to start. Get your foot in the door however you can.

Yes, this was my conclusion as well. I was lucky to have a connection at a W-2 hospital-employed gig that seems more sustainable.

Seems.

 

[EctopicFetus]

No appetite here to take back contracts? I mean USACS only owns contracts no actual product. We the docs are the product. Why not take over their contracts. Seems no appetite to even try. I think would be wise to gather a small group together and work with embc or aaempg and get some help when things implode for envision app USACS etc.

 

[bravotwozero]

No appetite here to take back contracts? I mean USACS only owns contracts no actual product. We the docs are the product. Why not take over their contracts. Seems no appetite to even try. I think would be wise to gather a small group together and work with embc or aaempg and get some help when things implode for envision app USACS etc.

That would require getting around the non compete clauses…

 

[Backpack234]

At the risk of beating the same drum over and over...anybody looking for a job needs to find a hospital-employed/VA/Kaiser/DoD/IHS gig. Sure, a genuine unicorn sdg that doesn't have a predatory pre-partner track is the most ideal -- if you can find it.

And if you're not currently looking for another gig but still work for a CMG, you need to be looking at one of the above places. Even if it's just prn to start. Get your foot in the door however you can.

Crazy. My thoughts exactly. Anyone else have advice on working for the VA? Looks like the best bet around here

 

[hundreddaysoff]

No appetite here to take back contracts? I mean USACS only owns contracts no actual product. We the docs are the product. Why not take over their contracts. Seems no appetite to even try. I think would be wise to gather a small group together and work with embc or aaempg and get some help when things implode for envision app USACS etc.

I think it's an awesome idea in theory. Fight the power!

In practice, I need to leave CA for family reasons independently of all this nonsense, so it's kind of a moot point. If I was single and dedicated to staying here, then yeah, it'd be a fun adventure, as I have no debt. Tempered by the fact that my coworker docs are also in the hock to USACS on the 5-year equity vesting plan. (And but they don't know they may well be screwed out of the 5-year payoff they think they're getting by Apollo and the current Entering Class Of The USACS C-Suite.)

Also, I suspect it would be very hard for an independent group to turn a profit at my particular shop. The whole reason VEP took over in the first place is because the old local group couldn't find a way to make the money work. VEP didn't seduce my hospital's admin; the old doc owners just gave up.

Envision couldn't make a profit on the other local ER contract either, and that hospital ultimately ended up taking back that contract and making its docs W-2.

In the big picture, I hear PE in general (not just in medicine) is hurting in places now that it's getting more expensive to borrow money, even with the overly-tepid actions of the Fed so far.

I hope the system becomes unsustainable and collapses on itself and the hospitals themselves take back their contracts and make things a bit more local and sane by taking on former CMG serfs as W-2s. Note that this would have the unhappy side effect of also screwing many Boglehead/WCI-type docs out of all their paper gains over the past few years.

In reality, I fear that the Feds and PE are so intertwined that PE will always get the first cut if the economy goes south. Just like in 2008...

AFAICT, this is What's The Matter With Kansas, BTW. To a first approximation, it's PE. This is what the Great Reset conspiracy theorists are really on about. All this culture war nonsense is mostly just an epiphenomenon and a distraction.

 

[hundreddaysoff]

I'm moving on to better, much higher paying job. Will stay part time at this shop because it is a great team there. I would do damn near anything for the docs I work with.

Same. My hospital itself is locally-owned and cool as hell; they just made a bad decision in letting the CMGs in.

Worst part of this whole black swan for me is that the other docs at my shop may well get scaaaa-rewwwwed just when they think their payouts are coming, and unlike me most have no choice but to stay as they still have local roots or big debt.

 

[EctopicFetus]

That would require getting around the non compete clauses…

Can have your friend who doesn’t work there get the contract and then u can work there and then get ownership once that’s gone. Will be curious if the ftc removes that.

 

[emergentmd]

TH “bought out our group”, and said nothing will change. Pay would not change whatsoever. I stayed 2 yrs to fulfill the buyout. (Very grateful for the nice buyout bc I put the whole buyout into RE and 10x my buyout in 7 yrs).
Right after I left, they started
1.rvu based pay “it will be income
Neutral”. Bahahaha
2. Cut shift lengths
3. Eliminated a shift
4. Made docs go home early when census low.

Now all the legacy docs are essentially gone.