USAP Austin and Colorado-USAP decline begins?

[Howard888]

Austin working pre call, post call, can’t get CRNAs or new MDs as horrible job. Cost of living California level not helping

Colorado-word is USAP has lost multiple contracts not just St Joes

Pipeline for USAP has dried up…no new groups joining. Restrictions now on internal stock sales.

I thought USAP would be last amc standing, and I realize every usap location different-but if you don’t or can’t pay your mds and CRNAs and put returns to private equity first…….

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[linkin06]

lol restrictions on sales. Sounds like GameStop. Always was a Ponzi scheme, now even more evident

 

[Howard888]

Yeah had a friend tell me they placed some restrictions on internal stock sales for pandemic effects and increasing costs. I guess enough groups became vested they were worried many older MDs would sell and leave. Not sure if restrictions still in place…..but what’s the point of the stock of it’s not easy to offload when you want. Maybe a member with USAP can clarify but that’s shady

 

[GassYous]

Its okay the stock only cost 100k

 

[gasdoc77]

Restricting internal stock sales is exactly what Nashville's AMG did recently, just before being bailed out (and all stock becoming worthless).

 

[MirrorTodd]

lol restrictions on sales. Sounds like GameStop. Always was a Ponzi scheme, now even more evident

Ok I'm not gonna go reddit nuts here but a private company restricting stock sales is waaaaayyyyy different than a publicly traded company having it's stock restricted by brokers/market makers from being bought.

 

[thinkorswim]

Ok I'm not gonna go reddit nuts here but a private company restricting stock sales is waaaaayyyyy different than a publicly traded company having it's stock restricted by brokers/market makers from being bought.

It may be apples and oranges, but it doesn’t matter when both fruit are rotten. It’s never a good sign.

 

[sevoflurane]

Restricting internal stock sales is exactly what Nashville's AMG did recently, just before being bailed out (and all stock becoming worthless).

Hey gas can you elaborate on this? What happened and who bailed them out? How was the stock made worthless?

 

[aneftp]

I’ve been telling everyone for a long time. USAP is gonna to end up exactly like American anesthesiology (mednax subdivision). American anesthesiology was the high flyer from 2007-2014. Than the lucrative contracts dried with Usap forming and taking over with the lucrative buyouts from 2014-2018 ish.

Of course Sheridan and team health have brought over a few lucrative contracts here and there.

But it was first American anesthesiology and then usap as the primary lucrative buyouts.

High labor costs especially crnas are eating up profits. Most of the usap current places require little or no subsidy from hospital. Which is fine when you are clearing millions in profit. The squeeze is on.

I know Texas in general has been hit hard with the no surprise billing practices. My buddy closed up shop at his own fee for service anesthesia billing because of this. Texas was the wild Wild West with out of network billing $400/unit and insurers paid it. But that’s no longer the case.

 

[sevoflurane]

I hope that people who took a significant proportion of their “buy out” as stock or those who actually bought up more stock are not left in the dust. USAP lost a contract n my neck of the woods. Now back into PP hands.

 

[sevoflurane]

100k mandatory stock purchase always sounded shady. Makes sense for PP, not so much for PE.

 

[Arch Guillotti]

100k mandatory stock purchase always sounded shady. Makes sense for PP, not so much for PE.

Why would it be anywhere near that in PP? Just a token amount.

 

[aneftp]

100k mandatory stock purchase always sounded shady. Makes sense for PP, not so much for PE.

It was 250k from 2015-2018 I believe in mandatory stock purchases.

 

[Ashers]

100k mandatory stock purchase always sounded shady. Makes sense for PP, not so much for PE.

NPH had a similar stock purchase amount as a buy in when I talked with one of their groups back in 2020. I said no thank you.

I've seen some ridiculous cash buy ins to PP as well that I said no to. No regrets to declining all of those.

 

[sevoflurane]

NPH had a similar stock purchase amount as a buy in when I talked with one of their groups back in 2020. I said no thank you.

I've seen some ridiculous cash buy ins to PP as well that I said no to. No regrets to declining all of those.

That’s good.
I had a 60k reduction in income for 2 years in my group b4 full partner 8 years ago.
No problems w that really.
In this market we aren’t even asking for a buy in and I think most PP groups are the same.

 

[Arch Guillotti]

NPH had a similar stock purchase amount as a buy in when I talked with one of their groups back in 2020. I said no thank you.

I've seen some ridiculous cash buy ins to PP as well that I said no to. No regrets to declining all of those.

I think buy-ins and stock purchases are getting conflated here.

 

[linkin06]

I think buy-ins and stock purchases are getting conflated here.

My understanding is that, to become a USAP partner, you must buy in stocks, so I do believe USAP conflated it by design

 

[MirrorTodd]

My understanding is that, to become a USAP partner, you must buy in stocks, so I do believe USAP conflated it by design

I feel like that should be illegal? Like how is that legal?

 

[GASMAN]

My understanding is that, to become a USAP partner, you must buy in stocks, so I do believe USAP conflated it by design

That is true and the selling of the stock is not free from restrictions.

 

[aneftp]

My understanding is that, to become a USAP partner, you must buy in stocks, so I do believe USAP conflated it by design

The original intent always was to spin the company as a IPO end of 2017.

Remember when Usap was formed. Mednax (American anesthesiology) was just about to peak stock market share in 2014/2015. My friend was one of the original buyouts from mednax. So his stock price quadrupled they gave him.

So the original Usap big 3 who formed the company in 2014 who were awarded 600k in arbitrary Usap internal stock valued at $1 a share

So in addition to the 2 million cash straight payout taxed at 15%. This internal stock was potentially valued at another 2-3 million depending on ipo. Thus making each partner net payout potentially worth 5 million each

They clearly miscalculated. Mednax peaked in 2015

Sure the big 3 still making a ton of money. Purely on good payor mix. Private equity doesn’t want to take 20-% They want to pump and dump.

Now labor costs are so high. If the individual sites can’t maintain profit margin. They will let the contract expire.

So the iffy payor mix contracts will be given back to the hospitals to deal with. Unless hospitals pony up subsidy. Many hospitals right now are ponying up locums money out of a different pot.

So don’t think Usap or envision or napa are ponying up the locums costs. The hospital are just reimbursing the amc. Because they will not operate at a lost.

 

[Dr. Rude]

…don’t think Usap or envision or napa are ponying up the locums costs. The hospital are just reimbursing the amc. Because they will not operate at a lost.

Yup. The locum costs are a pass through. In many cases If the hospital balks and wants out, the AMCs say fine. But we are enforcing the noncompete. Ruthless capitalism.

 

[Howard888]

The original intent always was to spin the company as a IPO end of 2017.

Remember when Usap was formed. Mednax (American anesthesiology) was just about to peak stock market share in 2014/2015. My friend was one of the original buyouts from mednax. So his stock price quadrupled they gave him.

So the original Usap big 3 who formed the company in 2014 who were awarded 600k in arbitrary Usap internal stock valued at $1 a share

So in addition to the 2 million cash straight payout taxed at 15%. This internal stock was potentially valued at another 2-3 million depending on ipo. Thus making each partner net payout potentially worth 5 million each

They clearly miscalculated. Mednax peaked in 2015

Sure the big 3 still making a ton of money. Purely on good payor mix. Private equity doesn’t want to take 20-% They want to pump and dump.

Now labor costs are so high. If the individual sites can’t maintain profit margin. They will let the contract expire.

So the iffy payor mix contracts will be given back to the hospitals to deal with. Unless hospitals pony up subsidy. Many hospitals right now are ponying up locums money out of a different pot.

So don’t think Usap or envision or napa are ponying up the locums costs. The hospital are just reimbursing the amc. Because they will not operate at a lost.

This is 100% correct although they are finally starting to lose contracts they want to keep and not just marginal payer mixes because they can’t pay the clinical workers enough (Colorado)

Also correct in that the big 3 did well regardless…however the last 4 or 5 groups to join made a huge mistake as no more layers (groups) to add to the pyramid and costs are way higher with no surprises act capping revenue at same time (this is Austin and they were already stipend dependent with a hospital system who lost money last year-Ascension)

 

[TexBlazer2106]

I know Texas in general has been hit hard with the no surprise billing practices. My buddy closed up shop at his own fee for service anesthesia billing because of this. Texas was the wild Wild West with out of network billing $400/unit and insurers paid it. But that’s no longer the case.

400$/U? Surely you’re joking.

 

[aneftp]

400$/U? Surely you’re joking.

Those are real numbers. But with surprise billing act. It’s screwed the little independent anesthesiologists who do their own billing.

 

[TexBlazer2106]

Those are real numbers. But with surprise billing act. It’s screwed the little independent anesthesiologists who do their own billing.

Man that’s crazy! I’m new to all of the billing and back room stuff, but that’s like 7-9 times what a blended unit is today.

 

[amyl]

Just curious who the “big 3” are that you keep referring to?

Idk, the other pp group in my town is shady af. Super partners… playing games with credentialing…. Not a fair group for newcomers. USAP is much more transparent and fair.

I know a little gossip about Reno- USAP and admin didn’t see eye to eye on stipend… but that’s gossip and not an authorized source.

I know everyone likes to demonize usap… but it’s definitely the lesser of all evils. Napa and envision take much bigger $ cuts… team health etc. and if you think you’re better off working for a hospital admin - well good f—-ing luck.
Hospital admin are number one to support crna solo or high “supervision” malpractice sponge ratios…. Whatever is cheapest

Those people aren’t your friends.

 

[amyl]

And it was USAP that bailed out / bought the Nashville group.

 

[ambiturner]

Those are real numbers. But with surprise billing act. It’s screwed the little independent anesthesiologists who do their own billing.

Let’s be real, the little independent anesthesiologist charging $400/unit was doing plenty of screwing himself and is a big reason why the field is in the mess that it’s in with the NSA.

 

[thinkorswim]

Let’s be real, the little independent anesthesiologist charging $400/unit was doing plenty of screwing himself and is a big reason why the field is in the mess that it’s in with the NSA.

I would be surprised if insurance companies paid out anything near that much to a solo anesthesiologist, or anyone for that matter. And if that’s what the patient is being billed directly, well then that’s extortion.

 

[Howard888]

Big 3 is Orlando, Houston, Dallas. Top of the pyramid. Those 3 will be last to fall.

USAP bailed out Nashville because it was cheap and it will increase their overall EBITA for institutional sale briefly but don’t kid yourself…what is USAP going to do better than the old private equity group? Maybe some slight billing efficiencies?? With no surprises act they won’t be able to negotiate a higher commercial rate. Those MDs won’t be getting stock worth anything. This is all to try and pump and dump for any outside institutional sale. It was not to help the MDs.

USAPs model is dead. No surprises act effectively killed it. They will not be able to get any increases in commercial rates going forward as they are already top of market. Expenses will continue to increase though. Unless they pick up some crazy good payer mix facilities the only way for the MDs to continue to make the same income will be to work harder/longer or get a hospital stipend. Given that most hospitals had terrible years in 2022…that’s not happening and many ceos realize you are just paying a stipend to pay private equity. They’ll look to employ the group themselves or find another group-that’s Reno and Colorado and I bet Austin and even San Antonio might be next.

CEOs aren’t going to pay stipends just so private equity gets a return. Nor should they.

 

[aneftp]

Let’s be real, the little independent anesthesiologist charging $400/unit was doing plenty of screwing himself and is a big reason why the field is in the mess that it’s in with the NSA.

Not really. Big amc strong arming IN NETWORK insurers $150/unit on 100000x the volume as the small independent anesthesiologist cost the system much much more. The small independent anesthesiologists lucky to get $80-90/unit in network.

 

[nimbus]

Not really. Big amc strong arming IN NETWORK insurers $150/unit on 100000x the volume as the small independent anesthesiologist cost the system much much more. The small independent anesthesiologists lucky to get $80-90/unit in network.

And in some settings the independents can still do very well because they do zero Medicare CABGs and hip fractures, and zero no-pay work.

 

[aneftp]

And in some settings the independents can still do very well because they do zero Medicare CABGs and hip fractures, and zero no-pay work.

Don’t blame the small independents. The big amc did the same thing out of network and insurers were left to settle at $250/unit out of network in Texas at once again 10000x the volume as the little guy.

 

[nimbus]

Don’t blame the small independents. The big amc did the same thing out of network and insurers were left to settle at $250/unit out of network in Texas at once again 10000x the volume as the little guy.

Not blaming anyone.

Just saying some independents in boutique settings do very well even with poor contracted commercial insurance rates because they have a very favorable payor mix.

 

[gasdoc77]

Hey gas can you elaborate on this? What happened and who bailed them out? How was the stock made worthless?

My understanding was the group had accrued a lot of debt to remain operational and had many unfunded liabilities such as pension contributions to their employees. Whether the partners/shareholders would be "on the hook" is an interesting thought experiment. I''m sure their shareholder agreement was more than a few pages. Rumor is they were bailed out by USAP in exchange for assuming their liabilities, but outstanding shares were liquidated.

 

[amyl]

Not every ceo is stupid enough to think they can “do better” and will gladly pay a stipend to cross that off their to do list.

 

[amyl]

There were a few issues with the Nashville group beyond just sub-optimal billing efficiency that I cannot discuss publicly but it’s just not that simple.

IF USAP dallas “falls” in my lifetime - well then Howard I guess I’ll owe you a drink and will stand corrected - just don’t see that happening.

 

[Southpaw]

There were a few issues with the Nashville group beyond just sub-optimal billing efficiency that I cannot discuss publicly but it’s just not that simple.

IF USAP dallas “falls” in my lifetime - well then Howard I guess I’ll owe you a drink and will stand corrected - just don’t see that happening.

Neither you or Howard appear objective here. I’m not sure why but from reading your posts you seem very invested in USAP having success both in Dallas and elsewhere. Why? It’s just a company and it’s just a job.

I do think USAP is better than NAPA, Northstar, or any other private equity BS out there, but only because they generally leave the model alone meaning if you’re MD only they’ll leave that in place whereas NAPA and Northstar absolutely want 4:1 all day every day which is truly awful for this field.

I think you’ll owe Howard a drink. It’s pretty clear we will all be working for the hospital one day. I think anesthesiologists have a much better chance of having good work:life balance by working for the hospital than either private practice or working for private equity, but only if they’ll advocate for themselves and have a spine.

 

[sevoflurane]

My understanding was the group had accrued a lot of debt to remain operational and had many unfunded liabilities such as pension contributions to their employees. Whether the partners/shareholders would be "on the hook" is an interesting thought experiment. I''m sure their shareholder agreement was more than a few pages. Rumor is they were bailed out by USAP in exchange for assuming their liabilities, but outstanding shares were liquidated.

I mean I can’t blame them then. Seems like it was mismanaged in PP.

 

[sevoflurane]

Neither you or Howard appear objective here. I’m not sure why but from reading your posts you seem very invested in USAP having success both in Dallas and elsewhere. Why? It’s just a company and it’s just a job.

I do think USAP is better than NAPA, Northstar, or any other private equity BS out there, but only because they generally leave the model alone meaning if you’re MD only they’ll leave that in place whereas NAPA and Northstar absolutely want 4:1 all day every day which is truly awful for this field.

I think you’ll owe Howard a drink. It’s pretty clear we will all be working for the hospital one day. I think anesthesiologists have a much better chance of having good work:life balance by working for the hospital than either private practice or working for private equity, but only if they’ll advocate for themselves and have a spine.

Maybe.
I think PP is having a resurgence honestly.
Picking up the pieces from a failed PE contract can indeed end up being better for everyone. You get a pay raise (as PE isn’t skimming from the top) plus you call the shots on how the group is managed.

 

[ambiturner]

Not really. Big amc strong arming IN NETWORK insurers $150/unit on 100000x the volume as the small independent anesthesiologist cost the system much much more. The small independent anesthesiologists lucky to get $80-90/unit in network.

Yes that cost the system much more but what do you think had a bigger effect on the public and lawmakers? Insurance companies crying bc they were having to pay more to USAP, or the sob story of a family whose $10,000 out of network anesthesia bill was sent to debt collectors?

 

[Shimmy8]

Big 3 is Orlando, Houston, Dallas. Top of the pyramid. Those 3 will be last to fall.

USAP bailed out Nashville because it was cheap and it will increase their overall EBITA for institutional sale briefly but don’t kid yourself…what is USAP going to do better than the old private equity group? Maybe some slight billing efficiencies?? With no surprises act they won’t be able to negotiate a higher commercial rate. Those MDs won’t be getting stock worth anything. This is all to try and pump and dump for any outside institutional sale. It was not to help the MDs.

USAPs model is dead. No surprises act effectively killed it. They will not be able to get any increases in commercial rates going forward as they are already top of market. Expenses will continue to increase though. Unless they pick up some crazy good payer mix facilities the only way for the MDs to continue to make the same income will be to work harder/longer or get a hospital stipend. Given that most hospitals had terrible years in 2022…that’s not happening and many ceos realize you are just paying a stipend to pay private equity. They’ll look to employ the group themselves or find another group-that’s Reno and Colorado and I bet Austin and even San Antonio might be next.

CEOs aren’t going to pay stipends just so private equity gets a return. Nor should they.

You sure do speak very assuredly and in absolutes on topics you are 100% incorrect about.

Your prognostications about the future may very well end up reality, but you’re making a lot of incorrect assumptions on many different levels of this.

 

[TXAG99]

Yea, there’s a lot of conjecture and nonsense in this thread. Don’t believe everything you read on SDN.

 

[sevoflurane]

USAP was kicked out of my part of the state a few months ago.

That group is now MD only/private practice.

 

[amyl]

USAP never balance billed patients. Not even in our fight with United health care… which is probably the only reason why we don’t all work for United health care/sound physicians.

 

[amyl]

Neither you or Howard appear objective here. I’m not sure why but from reading your posts you seem very invested in USAP having success both in Dallas and elsewhere. Why? It’s just a company and it’s just a job.

I do think USAP is better than NAPA, Northstar, or any other private equity BS out there, but only because they generally leave the model alone meaning if you’re MD only they’ll leave that in place whereas NAPA and Northstar absolutely want 4:1 all day every day which is truly awful for this field.

I think you’ll owe Howard a drink. It’s pretty clear we will all be working for the hospital one day. I think anesthesiologists have a much better chance of having good work:life balance by working for the hospital than either private practice or working for private equity, but only if they’ll advocate for themselves and have a spine.

Because I love my practice and my partners - some of the best guys (and girl) around.

 

[Howard888]

So while I completely agree that you shouldn’t believe everything you read on sdn but sometimes it comes from good sources,

See Sevos post. My contact in Denver very sure as involved that USAP has lost multiple large hospitals effective spring/summer.

I have a very good friend in Austin. He also loves his partners but likes his job much less now. Working much more and much differently for same income as pre sale (which in todays dollars is actually much less). Stated on multiple occasions…just not the same group or job. Lots of unhappiness.

Both have told me of the stock sale restrictions. That was a little while ago so maybe changed but for several years restriction other than a one time limits sale. Can’t just sell whenever you want.

A group doesn’t have to lose a contract to fall. More work for less pay, less ownership in daily tasks, etc….eats a group from inside out. Becomes a shell. I know Dallas isn’t there yet but many are

 

[Southpaw]

Because I love my practice and my partners - some of the best guys (and girl) around.

Your practice, your partners, and the need for anesthesia services exist whether USAP holds the contract or not.

Do you receive money from USAP as a site/regional director or for any reason outside of your clinical work?

 

[ASA6]

USAP has indeed lost money contracts. In addition to a few hospitals they have lost many surgery centers. In fact once senior partners had their stock vest they all left and took the surgery centers with them.

 

[amyl]

Your practice, your partners, and the need for anesthesia services exist whether USAP holds the contract or not.

Do you receive money from USAP as a site/regional director or for any reason outside of your clinical work?

No I do not. You are right… my division is very stable - was here before USAP and will be here. I have friends elsewhere in USAP that a worry about and I do own stock.
I just truly believe that USAP is better - the lesser of all evils if you will. Envision Napa etc all take way bigger cuts and were pretty terrible to some employees during covid.
Hospital ceos and admin are sure to promote crna only or high ratio supervision type practices… they are business guys only and see that you can bill the same for both… as long as it doesn’t cost them surgeons they can’t easily replace they don’t care if it’s an md or crna or care team…
Case in point - my old hospital in indiana that was md only has gone to a crazy mishmash if providers. One crna practicing independently, a couple drs and an AA… AA was hired because she’s some surgeons wife. It’s a mess - they don’t care. They’ll get rid of all the drs the second they think they can get away with it