Democratic Group Finance - Expert Panel Q&A

- My name is Sergio Hernandez, and I am the chair of the democratic practice section. And this is our first webinar of 2023. We're very excited to share some new content with all of you, and so thank you for all of those who joined. We will start off with a brief agenda. The agenda includes just our basic introduction of the section's leadership. We're gonna have a presentation on our E-QUAL project through ASEP. We will have our panel discussion, which revolves around some case scenarios, in terms of some administrative challenges that sometimes democratic groups face. And then we'll just have some time at the end for some final thoughts. We will start off with introductions now. Like I said, my name is Sergio Hernandez. I'm the current chair of the democratic group practice section. I'm a partner with Vituity over the last 10 years, I'm a medical director for a three hospital system in Los Angeles County. Chris.

- Hey, sorry, I was fixing my coffee mug there. Chris Ross. I'm from Indianapolis, I'm a partner in Medical Associates. We serve five different hospitals around the Indianapolis area. Been the longest running democratic group in Indiana. And I've been a partner there for 12 years. And now I'm president-elect of this fine group here.

- Thanks, Chris. Scott.

- Scott McCann. I am part of Emergency Physicians of Tidewater. We are a seven hospital system associated with the EVMS residency, and I am a medical director at one of our community sites. And I've been with the group for 11 years at this point.

- Dave. I think you're on mute, Dave.

- Rookie mistake. I don't think I've done that in a while. Greetings everybody, My name is David Hall. I am president of IEP, we are based in the metro Detroit area of Michigan. We are five hospitals, three different hospital systems, multi-specialty group covering anything from hospitalist medicine to emergency medicine. And I have been practicing with IEP since 2010.

- Great. Jay?

- Yeah, Hi everybody, Jay Mullen. I'm the immediate past president, or past chair of this section. And I'm the CEO of Bluewater Health. We are an emergency medicine and hospitalist medicine group in Massachusetts, Maine, and Vermont. And I'm also the chair-elect of the Emergency Medicine Business Coalition, which is a group of democratic physician-owned emergency medicine groups. And we've actually teamed up with ASEP to put on a masterclass for indie groups. The inaugural one was just last year. It was met with rave reviews, was a fantastic success. And we're having it again May 15th to the 18th. So please take a look, and see if you or anyone in your group might benefit. It really is a great conference.

- Thanks Jay. Jamie.

- [Jamie] Hello everyone, sorry I'm off camera. I'm actually trying to get my treadmill in here. Between meetings, I get the privilege of being the board liaison to this fantastic section. I'm in a private democratic group myself, now going on 16 years, right out of residency. It's a passion of mine, it's also a product of the masterclass that Dr. Mauer and I put together, and several people on this call are actually faculty for that. So it's very exciting that we help propel democratic groups and help them be sustainable in the changing landscape of our specialty. So with that, I'm pretty excited for this webinar. Thank you.

- All right, thanks Jamie. Now that we're done with introductions here, we do have a great presentation here from E-QUAL. So take it away.

- Thanks, I'm Arjun Venkatesh, I'm an emergency physician. I am at Yale on faculty, and I have been the principal investigator of the Emergency Quality Network since we started back in 2015. And the one line history is that we started back in 2015 with a CMS grant. And that CMS grant created a mission that we have not changed since, which is to engage emergency clinicians and leverage EDs to improve outcomes, coordinate care, and reduce costs. We have run a variety of different sort of practice-based quality improvement collaboratives over the years. And we've evolved over from that CMS funding to now getting funding from a variety of different foundations. And from that foundation funding this coming year, we're running a collaborative focused on stroke care, and one focused on care for substance use disorders, inclusive of both alcohol and opioids. The network has been really successful at supporting EDs around the country. Almost 1,400 plus EDs across the nation have been part of our projects. It's usually three, four, 500 that are in each project every year. One of the things I'm really proud about is that 600 of those EDs are in rural areas, critical access hospitals or safety net providers. And in total, over 30,000 emergency clinicians have been at a site that's been engaged in E-QUAL. Our bread and butter is you all, when it comes to who joins E-QUAL. This is not a research project. We do research and we do put out important stuff around the value of emergency care, but it is not designed as a research project. It's a big group team QI project. And the average ED that joins is about 25,000 visits a year. It's a community ED, part of probably a democratic group practice, because those are the folks that sort of have the best intersection of getting gains and benefits from joining, as well as being supported by the QI resources we have. I think fewer than 5% of the EDs in E-QUAL are at academic sites like my own. Next slide. The reason people join the E-QUAL network each year, we run it on a calendar year basis every year, is really, that top line's the main one, which is that your group is probably participating in the MIPS program for the quality payment program. You have four buckets of things you gotta get done every year, one of which is improvement activity credits. It is impossible to keep track of all the acronyms, keep track of all the requirements, know what you're supposed to do for CMS. And so what we do is, at least for that category, the improvement activity credits, we basically say don't worry about it. We peel it off and we say hey, do an E-QUAL project, and we have embedded all the necessary points for the MIPS program in it. And so it doesn't take care of your quality reporting or some of the other aspects, but it guarantees you'll get full credit, maximum points in improvement activities without having to learn any part of that from CMS. Many of the sites that also join, particularly the smaller groups, don't have access to big datasets around benchmarking. And so you get real-time benchmarking data. We do very focused low burden data collection efforts, and we get you back data about yourself compared to all the other EDs in E-QUAL within 30 days. So much faster than what people are used to getting either from their hospitals or other projects. A lot of EDs will feature this to their hospital partners when it comes to contracting and their questions asked around, like, what are you guys doing around quality? We're part of this big national effort. And usually the topics we pick are things that hospitals are either under pressure from regulators around, or they're under pressure from quality measures around. And so there's a lot of alignment that you can create, and we sort of have become the plug and play solution. So when a hospital CMO goes to an ED director and says what are you guys doing about opioids, or what are you guys doing on stroke care, we do E-QUAL. And we have found that a lot of groups have found that to be a very successful way to connect the dots. There are also access to free content, participation in E-QUAL's free. eCME, that's free. And then MOC credits for your ABEM certifications too. Next slide. This is what it looks like each year. A site, or an ED site, would identify a champion. If your group staff's two or three EDs, you get two or three champions. Sometimes one person does it for all the sites. They do an enrollment questionnaire, pick that champion, and then over the course of six to nine months, you just do a QI project. And so often this could be a quality director, medical director, different folks at each site will do one QI project collecting data at the beginning and end, that's the benchmarking data to see how you're doing, get access to all the portal activities and webinars and CME that's available. And then at the end you get final wrap up reports, a certificate of completion, which you could use if there's ever an audit from CMS around improvement activity completion. And a lot of our groups have appreciated the certificate for that, next slide. This is what it looks like in general, in terms of, this is the first question I get. How much time is this gonna take me? These are the activities that happen in an average collaborative. Most of these are aggregate de-identified surveys. You tell us about what structures of care you've implemented, what best practices you've implemented in your ed, and we give you data about how that looks like compared to others. The two activities that take the most time are probably the benchmarking activity. Many of our sites tell us that they're able to do this in about 30 minutes because they are already getting or collecting or doing some work in that space. And so now what they've gotta do is basically audit 30 charts for a few basic data elements around stroke care. So for example, you'd find a patient, an ED patient that got stroke care, maybe it's off of a list, you have a stroke alert, or it's a list that's provided to you from the hospital quality department, or you just query, a lot of people's billing company will hand them, you know, here's 30 MRNs of people with a stroke. And then you look at some basic data elements. What was the time of arrival? Did the patient get CT, CTA or MRI imaging? What was the time of the imaging? Did they get thrombolytic therapy? What was the time of that? Were they transferred out? If so, what time did that occur at? And what was the ultimate disposition? And so it's data that's available to you, it's fairly easy to abstract and put into our structured tool, and then we're able to turn that around into about 10 metrics and get your feedback. Next slide. Enrollment is open, this is probably the most important slide of the entire presentation. I tell a lot of people that the hook on E-QUAL is that in order for us to be and fall under the umbrella of the CMS requirements from MIPS for this to count as a project that is a yearlong quality improvement project, we have to have a deadline, we can't have rolling applications where people join up in November and try to do the whole project in December. And so we're open right now. And we're really trying to make sure that people sign up. 'Cause it's always an option to sign up and then say, hey, we don't have the time or we don't have the resources, we can't do this later. But if you don't sign up before the deadline right now, you don't have the opportunity to do it during the year. And so I appreciate you all, and hopefully your department's joining. But also more importantly, is leaders within ASEP and leaders within this section spreading the word about E-QUAL is particularly the most important thing right now, because it really has become the largest place in which we as emergency medicine are allowed to collect data, show policymakers, show administrators, you name it, what the realities of emergency care practice are. You know, a lot of what we have done is put out some papers as well, that show here are structural limitations in ED. You know, people can have a pie the sky view of what stroke care could look like. But if you don't account for the fact that the vast majority of the country has no access to an in-person neurologist, about 50% has teleneurology access, and they are real realities on getting a patient out the door to the next hospital that are far beyond the control of that given ED, we have to have data that can sort of show that. And so E-QUAL has become a really important advocate, I think for practice on the ground, particularly in community-based practice around these types of issues. And so I'm hoping that we continue to grow, that we are able to pull more and more EDs around the country and because it has been a powerful story and powerful for a lot of the advocacy efforts in that space. So I'll stop there, see if anybody has any questions, and I know you guys have a full day of business, and I don't want to cut into it.

- Awesome, thanks so much, great presentation. I think it's a great resource for everybody to look at. Any questions from the group? Awesome.

- The most important thing, I should say one most important thing. Remind everybody it's free. And so signing up is free, participating is free. And so that's the single most important message to send out.

- Great, thank you so much. All right everyone. So we are gonna get started on our discussion. And I'd like to start off the discussion really to say that the democratic section is really for everyone on the call and everyone on this section to really grow their practices and to share best practices between members. I think all of us on the call really believe in the democratic practice model. I know I do. And so we are kind of moving a little bit into a new format to see if this promotes some more discussion between members and hopefully can kind of create this open dialogue within the section. So we are gonna do kind of a case discussion. These cases are completely hypothetical, but we are gonna have a panel to create some discussion on how our own groups would deal with each of these scenarios. And hopefully that will promote some questions among the audience, and hopefully we can be a resource for all of you and give you some insight. So we'll start off with the first case, like I did mention, I will be a panelist, Scott and Dave will be a panelist. If you need a reminder on our practice setting or the makeup of our group, we're happy to do that again. But we all come from very different sized groups. And so hopefully that'll provide a pretty unique perspective on each question. We'll start off with case one. So your group is growing. And it needs a full-time director to really focus on operations and growth. Previously you were a three hospital system, and you had been so for many years. Each hospital had its own medical director and who was paid a stipend based on the hours of administrative time worked. Now the hospital says, hey, you guys have been doing such a great job, we really want you to staff the rest of our hospitals. So now you're moving from a three hospital contract to an eight hospital contract. And so now you're dealing with how do we increase our administrative roles? And you're faced with the question of, you know, do we hire a president or a CEO for this role? And if you do so, how do you pay someone like that? How do you determine fair compensation between your administrative team, your local medical directors? These are pretty complex questions that I think most democratic groups face as they grow. So we're gonna start off the panel. I'm gonna let Scott start off this discussion, if you're okay with that, Scott. Talk about your experience with your group.

- Yeah, so you know, administrative work is always a difficult situation. Those putting in the time value their time. And those who are not doing the administrative work always feel like the clinical work that they do is more valuable to the group, more difficult and higher risk. So, you know, one take that our group has always taken on it is that we'll pay you for the administrative work, but we expect you to do more hours than we actually pay you for, that expectation is 10 to 20% more hours than you're actually compensated for. Additionally, transparency is really important here. How are these hours being used, an hours log so that others can see how that time is spent, and that it's spent for the benefit of the group has been really important to make sure that the jobs are useful and to make sure that you're actually putting in the hours that you're getting paid for.

- Thanks Scott, did your group, I don't know, did your group ever decide to go beyond like an hours paid model, or has that just kind of been working for your group?

- So we've done what we call administrative time or WET time. That's work equivalent time. So you get a reduced clinical schedule to be able to take care of the administrative work that you'd have to do. We also have created a second category where people get paid a straight stipend for a specific project. And then we also have administrative direct pay hour for hour for work, for other administrative tasks. So we've created three different pathways for compensation.

- Gotcha. Cool. I know Dave, Dave has a kind of a medium to larger size group. Dave, you want to talk about kind of, maybe the group's decision to kind of create that president or CEO role, and how did you deal with maybe some of these questions?

- Yeah, absolutely. So just to refresh everyone, so my perspective is we're a larger or mid-size group, I suppose, democratic practice completely. All ED physicians are partners generally in our plan. We're five hospitals, they're ranging between about 30,000 and 85, 90,000 patient visits for a total about 260K on the ED side. But then we have hospitalists and urgent cares, we run a LTAC, and we have some other business arms to us. So I'm the president and CEO of that model. And with that there's some, it's a little bit of a different responsibilities from an admin time, but the general principles still apply. Like if we were going backwards and starting from a three hospital system to go to three hospitals, excuse me, to you know, eight, and we needed to make one of our three medical directors, we'd probably go back to the way when we started, which was effectively taking, really valuing the clinical time as the provider, and saying first and foremost the president of that group still works clinically, but recognizing that there's a lot of admin time that needs to be put in with that. So you have to figure out a way to get a mix of the right amount of clinical time, but also the value for that position might be in the operational type role, which we basically fundamentally believe you have to know both to be really effective in a perfect world. With that, your compensation, we do what's called a protected time model. So it is, basically the general principle of our group is, is that the admin and the floor physicians generally make the same at base. And then depending on how much time everybody puts in, you may be above or below that point. Our admin truthfully do make more than the typical floor physician. So there's a delta that exists there, generally with time put in. But I think Scott made a good point. You know, the key there for us is you have to work way more hours than you're getting paid for. We did not elect to go with a just, I worked 10 hours non-clinical, so I bill for 10 hours at a reduced rate. I've heard of places doing that. But we effectively, the job is the job, get the job done. We'll give you your stipend or your protected time for it, and ask you to do some clinical on top of that. Effectively doing two different jobs now. But when you're going to getting these medical director positions, these are also high level and really important positions. And when we were smaller, you know, our medical directors, our leadership basically makes exactly what the floor physician, 100% floor physician makes, and it's just you're protecting that time for them. So they work less clinical, but the end of the day, it comes out pretty close. So that's one model you can do, especially when you're really heavily on just the emergency medicine side.

- Yeah, great, great insight. I think I heard a pretty consistent theme. We do that as well, that we expect kind of leaders to continue their clinical work, and I think that's a good practice for democratic sections. Is there anyone on the call really who has decided to go a different route? Do all leaders within the democratic sections here on the call work clinically, or do you have some that do pure administrative work?

- So our group, similar to Dave's group, where we have protected time for each of our leadership positions. All of our leadership positions are registered at quarter time protected time, and that's how it's stuck. And then we assume if that's unfair, there's gonna be competition for those positions, right. So if you're getting paid more than you should for administrative duties, then we assume that there's gonna be three, four or five applicants for that job. That's not really the case at the end of the day. So I think the quarter time that we have protected for our administrative folks is fair, and that's what we've done for the president of our group. That's what we do for medical directors. And we kind of share it all the same. I'm really interested in what Scott had to say, though, with his group with the kind of hours logging. So do your, Scott, do each one of your medical directors, your leadership positions get to choose whether or not they want to, I guess there was a few different ways you said you could do it, you could either get paid for your time, you could have protected time. Do they choose, or is it like if you're in a medical director position, you have to have protected time, or how does that work exactly?

- Each role's looked at uniquely. So stuff like recruiting, that is paid hour for hour, special projects, similar pay with a stipend, but then roles that require you to be off clinically, such as medical director, president of the group, that is administrative time off. So it's defined by the position. You don't get to choose how we log those hours.

- And you said you log your hours then afterwards, so do you have to log a certain number of hours per month as administrative time then to be able to make up for that time? 'Cause that was like 15 to 20% less than what the clinical time would be. So if you're, say you, that's 20% or whatever. So do you have to log the like 25% or whatever admin time to be able to make up for what you would be off that month? Is that how that works?

- Pretty close, so we, you know, we log it all electronically through an app called Tick. And it's got several categories that you can select, and everybody does that on a daily basis as they're doing their projects. Then at the end of the year, we review every position as far as the hours that they logged, to make sure that it's in line with the hours that we're attributing to that position.

- Got it, so it's like an aggregate at the end of the year you come up with, it's not month to month thing. That's what I was wondering, 'cause some months, I served as medical director for several years, and when I did, some months, like the beginning of COVID, I think I put in like 140 hours that month or something stupid, and then like the next, you know, some later months I would put in like 30 hours or something.

- Yeah, no, it, it's definitely an aggregate. December we know that the hospital cancels most of their meetings for the holidays, so that month tends to be a little bit lighter, whereas, you know, beginning of the year things start to pick up again with new metrics and things like that. It's a total aggregate for the whole year.

- Great discussion. Before we move onto case two, is there any comments or questions from the audience?

- Looks like Jen Khan's got her hand up.

- Gotcha, go ahead Jen.

- [Jen] Yeah, can you guys hear me?

- Yes.

- Perfect. So when, so I guess I should back up. We staff two facilities. We were originally a single site facility. And in 2021 we started staffing a second site. We are pretty rural, not many hospitals in our area. And of course it always seems like a really big leap to go from a single site to a second site. I'm very small compared to a lot of you. But when we did make that leap, the hospital was looking to change our medical director contracts. And I couldn't find much in the way of resources out there regarding medical director coverage. So initially the hospital's proposal was that there no longer be two medical directors, one for each facility, and they wanted to cut the medical director hours from a total of something that was, you know, kind of crazy high, it was 160 hours, but they wanted to cut it all the way down to 30 hours for both systems. We managed to negotiate to 80 hours. But I'd love to hear from the group how you approached those negotiations with the hospital system in terms of being able to contract for an appropriate amount of medical director coverage. Have I explained my question and outlined it well enough for you to respond?

- Yeah.

- Okay.

- Sergio, if I could maybe answer that. So yeah, hospitals are famous for that, because they look at their medical directors that they need in their pediatrics clinic, et cetera, and they don't really, they're not very involved, right. They don't need to do a lot of work. Whereas in the emergency department, the amount of work that's required is huge. You know, it's an apples or oranges thing. So what we've done at our hospitals that have lower volumes where we're getting a subsidy is we just agree with the hospital that listen, let's come up with the amount that you say we should be earmarking for the medical director, and then we as a group can decide if we want to actually compensate it better. And that way, you know, we're agreeing that, yeah, we're gonna ask our medical directors to do more and you don't want to pay for that, but you have to recognize that in order to have a really high quality medical director, you've gotta pay market compensation. The other thing that we did is as we grew, and thinking about your group growing, Jen, is we decided that we were gonna set a certain percentage of our annual revenue, including any subsidy from a hospital, towards leadership. And then that way if we doubled in size, quadrupled in size, halved in size, we had a formula that we could use that actually would tell us how much money we have available for these positions. And then we have an outside compensation committee that actually benchmarks what we're paying and puts in caps so that, you know, we don't continue to pay the CEO a crazy amount of money, and we make sure that we're actually meeting what the market for ED medical directors and ED leadership is, as opposed to what the hospitals are willing to pay.

- I'll add to that, 'cause the thing that I've seen consistently, Jen, is that hospitals never value, they won't value it with the money that it's worth. You know, as Jay is kind of saying, I'm just saying it a different way. And at the end of the day, if you want to do well in your contract and if you have competition in the area, you need a solid medical director that's there. And you certainly want to take care of your partners. So just uncouple, you know, we've had to uncouple the subsidy from the hospital and make it have to do nothing to do with what they give us, and more to do with what we've decided that compensation would be. And we'd effectively take that subsidy if it's there and just put it into the pot. Because we have, of our sites, some don't get any subsidy for their medical directors, we effectively do it all for free. And we make it up by volume and operations, and we're very fortunate to keep our contracts. It depends on the market that you're in on how the other groups around and what you're providing to them. But as long as you take care of your people and pay them right, one of the techniques you can use on top of that I'd like to add is that you can try to hide and use the fair market value. The people in the hospital, they are going by compliance and fair market value, and these are the things that make them make their decisions. A lot of times they're bureaucrats that are not involved with it, and they just, they base that on what they see. If you can use a fair market value number for that, you might be able to get them to put an uptick on it. And then at the end of the day, sometimes it blows up and they say, if you want the contract, we're not gonna give you any subsidy. You can just have the contract and completely do it. So all of those options are a thing, but a technique you can use is the fair market value, and see if you can get some leverage that way.

- [Jen] So we did use fair market value to get the medical directorships paid at a certain hourly rate, but when it came to allocating the actual hours, that's where we had a disagreement. And you know, I worry that as my system grows and we are asked to take over other EDs that they won't increase the medical director hours appropriately. I guess happy to hear that I'm not alone in this, but we as a specialty should oppose providing medical direction for free, especially in an emergency department, which is, you know, basically chaos most of the time. And your medical director is responding to that entropy.

- I would think you should, you gotta define the hours that your medical director is putting in. So somebody who's doing it can currently just say this is the amount of hours that I'm doing, I'm giving to the hospital, and just say this is, these are the hours and this is what it's worth. What we do for research projects has nothing to do with democratic work section is. When we have research funding, we say this is what every clinical hour costs. So the NIH one, we fund two thirds of what it costs for a faculty member. So when I have people trade hours, I say, look, you get NIH funding, you are gonna get X amount of money, but I can only lower your time by two thirds. Whereas if it was an industry supported grant, they're gonna pay the whole ride, so hour for hour, whatever your percent faculty support is. I can justify that. And then when we're looking at outside contracts, like we were staffing places for COVID, you know, they set up a big auditorium, this is my cost per faculty hour. If you can pay that, we'll do it. If not, we're not gonna do it. So establishing what the hours are, what your cost is, which I think most people are saying close to clinical time. Now internally it looks like some people are saying, well, we're gonna pay you clinical time, but you're really gonna work more. I mean that's a group decision. But to a hospital administrator, say, this is the amount of hours I'm giving you, this is fair market value, 'cause that's what they would make if they were working in the emergency department, do you want a doctor or not. And if they do, then you've got your argument, this is it. And then you just have to measure that up and say here it is. They can't take things from you, now they try, right? But there are rules and regulations saying hospitals can't force hospital based groups to give them things for free. All right, if you need those rulings, they go back to like the late '90s. The OIG basically, radiology groups were being squeezed by hospital administrators, they complained. And it's now in the code of regulations. You can find stuff that they're not allowed to pressure a hospital-based physician group to give them things, money for whatever, you know, this is time, which is money. So there are some ways to counterargue.

- Yeah, I agree with Bob with the hours worked. So we actually have, we report to our hospitals hours worked, not to our group. There were stark law concerns with our hospitals because we're affiliated, we're not employed. So they wanted to report that we were earning, or we were putting in hours for the stipends that we were given for medical directorship. And so that, whenever we got new contracts, we could look at that and say, hey, this is what we got. Or, you know, if we were to expand, we'd look at that and say here's how many hours we're logging for medical directorship, here's a fair market wage for an emergency medicine physician. This is about what it should be per per year. I mean that'll get you at least something, kind of like you said, to stand on. I don't know if you guys are keeping track of hours or reporting to the hospital, but that's, I think in our scenario, what would help.

- [Jen] stepping back, it would be very supportive to all of the democratic groups out there, actually to the CMGs if, you know, we were to set a benchmark, you know, when an additional emergency department is added to a contract, there is certainly a need for administrative oversight for that emergency department. You don't need to reinvent the wheel in terms of, you know, all of the triage protocols, stroke protocols, et cetera. But there needs to be, you know, specific oversight to that department. If ASEP were to create, or this section was to create a benchmark stating that this is the bare minimum number of hours that is standard when you add an emergency department to a contract, then we would all have the benefit of that resource when we negotiated our hospital contracts.

- Yeah, think that's really interesting and great points. I think maybe we as a section can kind of powwow. We have done surveys for the section in the past to try to get some baselines, but I think maybe, you know, like Chris mentioned, maybe a poll to see if we can kind of identify. I don't know how wide the variation is between democratic groups, but it might be interesting to find out. But great questions, we're here for you after always if you need any advice offline. I know Sarah had some discussions kind of on the chat board. Sarah did you want to voice those? I think the questions revolved around, you know, medical director pay versus higher administrative pay, and should there be a difference in pay.

- Yeah, it's more my frustration probably of just my personal group. Our medical directors don't make the same amount as our clinical physicians and then folks that are on the board. So like the managing partner, the treasurer and whatnot are making even less than the ED directors by probably about $35 an hour. And so I always find that very frustrating just because our group doesn't seem to understand that having administrators that can facilitate things quickly and keep our group efficient and make sure that we're running lean is really important, and actually does probably make money. And I didn't know if other people had a really good argument that they have brought up to their groups to get their groups to pay at a more equivalent rate to what a clinical hour is.

- So I think one of the questions you have to ask is do you want a physician doing the position? And if you do, then their time is worth their time. And if you have a bunch of people knocking down the door to want to do the job at a lower rate, then maybe you can get away with it. But if nobody else wants to do it, then that's the pay that you're gonna have to do to get the job done.

- Yeah, I agree with Scott. I think you have to be willing to step down from your position if you're not getting paid appropriately. I think it's an awful rough situation for a small group. But I think if what you're doing isn't worth your time and your group isn't recognizing that, I think then what you're doing isn't worth your time, and your group needs to realize that on the back end. So kind of like what Scott said, I mean there should be, these should be competitive positions. You want the best person in those positions to be able to come up with the best opportunities for your group, to work with your payers to try to make sure that you're getting reimbursed appropriately and taking all opportunities to stay afloat. I think it's crazy to underpay those positions, and I think that, you know, you have to see what happens if you don't have those positions to be able to realize how much you're worth.

- It's really interesting to hear, Sarah, that you're saying that it's actually less time, I mean less pay, because at the end of the day, I know for a fact when our group started, we were at 11, we were at 11 employees, now we have 400. And when we started at 11 employees, or 11 partners and that was it, that's who worked for the company. Our president at the time, the 11 docs that were there, he said, I'll be president, but you have to just pay me even to what I would be making. So make me whole was the words we used. I think if you can try to use that at very least, why would anyone do a position unless they hate the clinical piece of course. But I would argue that maybe that's not so great to have that as a leader. But you need to find a way to make that person whole at very least, because otherwise people can step away.

- Yeah, all great points. Great question, Sarah, I think it's a challenge, but I think we all on this call kind of really appreciate the leadership aspect that our directors and administrators can play with hospitals in the democratic practice section. Again, Sarah, if you have any questions offline, we're always available for you afterwards. In the interest of time, we'll move onto the next question, it actually kind of goes down to money again. So I'll start more kind of on the group finances side, but, case two, your hospital's CEO decides to meet with the group leadership and says, hey, you know what, the hospital's been doing pretty poorly through COVID, and your group receives a very large hospital stipend, but that hospital stipend really accounts for 10% of the site's finances. Your CEO doesn't know that, but your CEO asks you to consider a reduction of that stipend. How do you navigate that situation? And if you do have to take that cut, how do you go to your partners, what do you propose to your partners about a 10% revenue cut? Really, really tough questions. Dave, I'll put you on the hotspot first. and then we can go to Scott, I guess.

- Sure. I think that, you know, your first question, I think this is a kind of a business type entity to it. I'll come from that perspective. In one way the first answer is always yes. But you not just bend easily for them. You have got to find a way to get something out of this, because they're going to push you into that, if they've come to ask it. If you have a good relationship with your CEO or your regional director or regional manager or system president or whatever state leader at that site, you may be able to develop what you have or show them what you've done. The getting to this point, they have to understand, this whole time until they go to ask you that you have a problem, you have to develop such a good relationship with them as a leader and such a good rapport with them as a group that them asking you hurts them to do it. Make it hard for them to ask. But if they're absolutely gonna do it, then you get into the business question, which is what's your competition? Who is gonna come after your contract, if you want your contract, what does this do to your portfolio? Can you take a loss leader if that's what it is, if it's that bad, and you're basically comparing all of the other dynamic, the decisions that work into this. Does somebody else move into your space? Do they now suddenly, maybe look at it as in a positive. Maybe you take that 10% pay cut, but they give you three more contracts if that's the kind of group that you are. But if it's just one of those things where you're gonna have to make a decision on how you're going to, to make that said cut, a lot of times, you're not gonna cut hours, you're effectively cutting your profits, which is effectively the pay of the partnership generally in a democratic group practice. And the group's gotta just understand there's gonna be ebbs and flows when this comes and goes. It seems to me that the trend has been going to the lowest common denominator now, not going more. And if they can't find, if you won't do it, somebody else will. So my perspective would be if you are absolutely gonna get to the position where they are going to make you take this pay cut, try to minimize it, and then at very least get something in return. Even if it's an emotional win with that administrator who's there, don't walk away, sure, no problem. Make it hurt for them, and make sure that when you need something the next time they come back. Unfortunately they'll forget, so that's a pipe dream, but it's always worth a shot.

- Yeah, I think it comes down to the last question we had, and really the importance of paying really high quality leaders to be in a position where they can negotiate in good faith with hospitals. I think that's a very tough position, but a real position that I think a lot of leaders will face in their career. Scott, any thoughts?

- Yeah, I completely agree with Dave. You know, the first answer is yes, and then it's where do you go from that? And a lot of that depends on the market that you're in, the competitive nature of your contract and things along those lines. But, you know, another way that I would take this is an opportunity to make yourself stronger to your hospital or your hospital system in that, all right, maybe you can't do the 10%, but can we tie the 10% to a metric. That would then motivate your group to provide a quality that your hospital's looking for. The hospital may see it as an opportunity to save some money, but then you can also become a more valuable asset to the hospital, look like a higher performer by meeting metrics that motivate your group.

- Yeah. Any comments, or anybody have this situation recently at their own contracts? That's a tough meeting that I hope not to get any time soon.

- It's behind the loss of contracts across the country. I mean this is what the big groups are coming in. They're, you know, if you look at the AAM lawsuit against Envision in California, it's not the ED subsidy that they're trying to ameliorate, it's the anesthesia subsidy. So it was a bumbled contract. It said, you know, hey, we'll take over your loss on anesthesia to give us the ED so we can make a profit and cover that subsidy. So any subsidy for anybody, it's a flag, it's a target. People will come in and say we can do it for no subsidy. That's, you know, all there is to it. Sometimes that'll turn out to be a bait and switch, where, you know, two years later they come around and say we actually need a subsidy. But you basically, you're exposed if you have a subsidy. I mean, that's all there is to it. You're gonna, you know.

- My fear is the future.

- We've been asked to do this stuff, cut faculty pay, do this kind of stuff. I think all academic centers are going through this. And it's sort of like, all right, while you're gonna cut us 10%, this is what we're gonna cut in return. Know your downstream revenue if you can. If there's a possibility, you can figure out what percentage of missing income you control, how much that parlays into, I mean, a lot of places, you are the engine of the hospital, and you have more economic clout than you actually realize. If most of the surgeries are coming through the ED and that kind of stuff, there is some power to knowing your downstream revenue, and puts you in in a different position, just looking at pure ED-based professional fees.

- So Sergio, my group faced this exact problem. We had the hospital ask us to take a cut. And what we did is we had a relationship where we could turn this negative sum conversation, right, it's either your money or my money, and we turned it into a positive sum. And so we said, well yeah, we can do that, but here's how we have to do it. We've gotta make up the money somehow, because we're paying market rates. And we opened our books, showed 'em what we're paying. And then we said part of what's happening is our docs can't be as productive as they should be, because the boarding is too high, left without being seen is too high, outside of our control, and we end up making too many phone calls. So if you can get us scribes and bring the metric for decision to exit from the ED to benchmark, then we'll accept it. And if you can't, then you gotta return the money to us. and then we also said, and we're happy to collect this money from the carriers, but we need your support for us going non-par if the carriers won't participate competitively with us. And so we were able to actually negotiate better contracts with the carriers. And the hospital couldn't meet the metrics, but they know that it's out there. And so we kept our group whole, while the hospital felt like they had a partner in the whole conversation.

- Yeah, that's some tough conversations, Jay. I'm sure that was, but kudos to you for getting those done. This has all been like really great conversation. I feel like we can go many more minutes on all of these cases. I'd like to just do one more. I know we're kind of in that 11 minute mark. I want to open some questions at the end. I know Scott has to leave at the hour mark, so I want to make sure that you can address case three. So we'll move on to case three. Again, your group is growing, you've had these opportunities, you're the medical director of a single contract group. And you just won a RFP for a new contract. Problem is, is this contract is 50 miles away from your current site, and it's in a very affluent area of the state. Some of the physicians there want to join your group, but they make about $100 more an hour than your current physicians, based on payer mix. The site is too far to expect the doctors to commute back and forth on a regular basis. And so what model would you propose to achieve a democratic practice? Would you suggest equal pay amongst each site? If you wouldn't adjust the pay, how would you accommodate the partners who'd like to leave your home site to go to the high paying site? And if there's a desired site in your practice, how do you ensure adequate staffing at the other sites, to make sure that all your docs at your home site don't leave to the other practice and you're kind of in a shortage. So I'll start off with Scott. How would you address this?

- I would suggest equal pay. My concern is, I don't know how you answer those other questions without equal pay. I worry that you'd have physicians all flocking to the place where they can earn more money, assuming that the actual work performed is the same, your resources are the same, and things like that. That's how our group has practiced. You know, I don't think it's a physician's fault that their patients have less desirable insurance coverage. So, you know, equal pay is what I would suggest.

- Dave, thoughts?

- Yeah, unfortunately, I don't have a different contrary view to that. I mean we got a lot of different hospitals in different pay areas, and effectively we base our pay on hours of course. And then RVUs, not how much did you generate from the RVU. And that model, I've seen a bunch of different models. We like that. That way people aren't trying to fight to the more desirable site from a pay standpoint. The problem still exists even outside of that pay is now you got people that might want to live in one area or the other, which might have nothing to do with pay. So no matter how this shakes up, you're still gonna be dealing with a lot of different variables with that. I think if you can get everybody to buy into the equal pay model, let's put it in the pot and pass it out, you know, whatever mechanisms you have, based off of a RVU type model, you're already answering three or four of those other questions. The other question you had asked is what are you gonna do with a position that's making $100 dollars more per hour now coming to your group? I guess the question is that group had subsequently lost the contract for whatever reason. So if they still want to work in that area, they're gonna have to go by what your docs are all getting paid and how you build it. Try to sell them on why it's a value that we all do equal pay, why it's a value, what the strength is with having two hospitals instead of one might be in this scenario, let them know that the upside is far greater than that $100 per hour. Because at the end of the day, you have nothing if you lose it. So you have to find a way to make it exist and keep it, and creating, I think that's one of the things we all have, is the democratic model is really about culture. And the culture is that docs are taking care of docs, not taking advantage of each other. We're a part of all the solutions. When we have some good solutions, it's great, we all win together, and when we have some losses, 10% pay cuts and stuff, we all take that together. And that means all the sites do that. If you get large, like a democratic group say, that might be multi-state, that is huge. Now you have to do something different. To grow it, like Vituity does it a little differently, 'cause you have to in a larger size. But as long as you can keep that equal pay model, I would say that's your strong cultural upside, which I would go with every time.

- I know Jen had mentioned you picked up a site recently. Did you run into this issue with a differential or anything like that, sorry to call you out.

- Yeah, no, you're fine.

- Yeah, we ran into this exact scenario. And the issue for us though was that it wasn't in a more affluent area. It was in an underserved area with a higher number of Medicare and Medicaid patients. So similar but a little bit different. And so we, because it's a smaller underserved area that we knew physicians were not going to want to relocate to, we decided to make those shifts slightly more lucrative than our home site. So this is a little bit, you know, different of a scenario. In addition to that, we are also able to utilize a free hotel through our hospital system. So slightly increased compensation plus a free place to stay really sold our docs on the commute out of town. Because we could not hire and still have not been able to hire people to live and work in that community, we equally distribute the shifts for that facility amongst all of our partners and independent contractors, based on the number of shifts that they work every month.

- We had the same as Jen. So we took over a smaller contract that was in a rural area that had difficulty recruiting physicians. And it was a money loser for our group. We used it, kind of similar to the last question, we knew we were gonna take a little bit of a hit, but we parlayed that and said, hey, there was another more affluent contract that was held by another CMG that was in the same network. And so we said, well, you know, if we do well here, will you consider us for this other contract? And so that's kind of how we ended up growing actually, was through taking a smaller, less desirable contract. In this scenario, I think I'd probably be right along with Scott. I mean, you have to, I mean you have to promote the equal model the best you can. I think it's gonna be hard, depending on what other competitors you have for physicians in that affluent area, if there's other hospitals there that can compete with that $100 extra, that's gonna be more difficult for you. But I think your base would end up going up as well if you were taking a more affluent contract as well.

- Steve, I think we cut you off. Did you have any thoughts, no, okay. Well, again, we're coming up to four minutes now. I wanted to end on time. This was a really great discussion, at least for me, and hopefully for all the people on the call. This is just really a teaser for things to come for the webinars for the rest of the year, and hopefully our section meeting at ASEP. So thank you all for joining. A really important aspect of feedback for myself and for the committee is really recommendations on either how we can improve or topics going, that interest you for the future. So if you do have any comments for us, any questions, please send it our way so we can adapt our content to make it better for all of you. We're gonna skip through some slides, but Adam, if you can go down to our contact information. This is all of our contact information here. Please feel free to reach out to any of us, all of us, or go through the ASEP website to submit questions via the section. Like I said, we are here for you to provide any resources that you may need. Any last minute questions or comments from the group? All right, everyone, have a safe day, safe week. Thank you all for coming, and we look forward to seeing you all soon.