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MEDNAX, Inc. Message Board

  • paul_the_hermit paul_the_hermit Nov 8, 2009 11:57 AM Flag

    Is Obama Care (aka socailized medicine) good for MD?

    Any thoughts on what a government option will do to MD? Short term good? How about after the insurance companies are ruined by over regulation? Is this going to be a buy or run away and not look back?

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    • i don't think anybody really grasps the full implications of the healthcare bill. i certainly don't! but i'm assuming that we will slowly move towards a more socialized system. given our demography, more and more people are going to be on medicare, and if we have indeed entered a ‘new normal,’ more people are going to need medicaid. that's going to crimp physician reimbursement

      please don't misunderstand me-- mednax has a shrewd management team. (just look at the recent addition of shalala to the baord!) but i think the ppm model is horribly flawed. mednax has, however, very quietly, mastered it.

      regarding anesthesiology, i'm not sure how to evaluate the acquisitions. mednax seems to be consolidating all of the major practices in specific metropolitan areas. this is the right strategy as it limits the physicians' 'outs.' if a physician doesn't want to work for mednax anymore, he will have to uproot his family and move somewhere else. mednax, more or less, has their physicians ‘by the balls’ and can afford to shaft their physicians from a compensation standpoint, especially once the first term of the contract is up. this is something physicians never understand. they sell a few years' worth of net revenue to the ppm for effectively 20-30 years' worth of net revenue. if the ppm can retain physicians, then relative overpayment might be justified

      of all their physician specialties, anesthesiology has the most room for value add. anesthesia coding is, to say the least, troublesome. a lot of revenue is lost in some practices. at the same time, it's also very easy to get in trouble with the feds. given the company's history, lawsuits should be expected, and medicare fraud is prosecuted more aggressively than ever

      i still maintain mednax is going to have trouble with their crnas. a little history-- in the old days, one heard horror stories about how unscrupulous anesthesiologists used aggressive, improper coding and supervised 8 rooms at a time, yet were unavailable at times! this, thankfully, doesn't happen anymore. congress passed a law in the mid 90s-- that shocked everybody-- whereby if an anesthesiologist was caught billing as if he were covering 4 rooms, but in reality it was more than 4, then the medicare payment was reduced to what medicare calls ‘medical supervision’ and the anesthesiologist could be fined $10,000 per case. after that, there were a lot of compliance issues

      but, the problem with the crnas goes like this: from an operational standpoint, in the vast majority of elective, non-complicated cases, 2:1 (crnas per anesthesiologist) is generally ideal-- safe and practical. but this, of course, depends to a large extent on the health status of the patients, and therefore the risk involved. for example, with an open heart case, the anesthesiologist should go it alone-- 0:1. when you go to the max-- 4:1-- you have redundancy issues (ie another anesthesiologist needs to be available since when you have 4 rooms, the likelihood of being needed in 2 rooms at the same time is high). that said, from a practice management standpoint, something like 4:1 might be ideal, as it allows for swap and cover to a degree that makes everybody happy, and it's more economical in many cases

      you are right—mednax produces tons of cash flow, and unlike the buffoons back in the 90s, mednax mostly uses debt and cash from operations to acquire practices rather than stock. they are shrewd. but this is the corporate practice of medicine

    • I think without a doubt. There were few things clear in the bill that could be reported. One was that children would be covered.

    • Same old question now that it has happened. Is MD a buy, hold or run away and don't look back with this new socailized medicine that just passed?

    • It depends on the segment. Every NICU patient already has some sort of coverage for instance if a newborn's parents don't have insurance the baby can get on medicaid. So Obamacare has no upside, but if (when) it drives people off commercial insurance to governement insurance with a public plan option it would be an unmitigated disaster for MD's NICUs because commercial insurers pay about three times more than the governement. The anesthesiology business could benefit from increased coverage and physician fees from government in this sector are at least profitable so it could be a modest positive for the company, but it would not cancel out the major negative impact on the neonatal businesses.

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