This discussion has been moving from one area of California to another and the OC represents a substantial group of doctors in the current groups. In the discussions it’s still not clear yet if this is an all in or selective process yet. Many of the doctors in their groups have been under contract with Tenet for a long time and the obvious would be to keep those doctors for less disruption in care. What the pay cuts maybe for those doctors is not yet known.
The ER Department is a big part of this discussion as the 3 companies want the profitable ER business and will absorb losses with staffing hospitalists if need be according to this article. Of course this is all at this point still up in the air and the main incentive driving this is for Tenet to save money, what else. Tenet is headquartered in Texas to where they are both building new hospitals and acquiring a few others. In the Palm Springs Desert area a couple months ago, contracts with surgeons have already taken place.
Tenet Cancels Contracts With Orthopedic Surgeons in Palm Springs While Unrest Still Continues in California As the Company Mulls Over a National Contract for Doctors - Healthcare Still Supporting the Stock Market
The announcement of contracting for a nationwide contract for physician staffing originally was discussed in the the coastal areas just north of Los Angeles and those folks too have their concerns. We have been reading that some of the traffic now that would normally be taken care of in the ER rooms now has patients visiting free standing surgical or free standing urgent care facilities. In Texas hospitals recently stated they are starting to see this impact with a the number of patients visiting the ER decreasing. Now Tenet also has their own network of Urgent Care Centers they just rebranded, “MedPost” which have several locations across the US. One might also question if a nationwide contract would also cover physicians working at these centers too. What is also interesting is that you have insurer, United Health under their subsidiary name of Optum out building their own urgent care centers, 2 have opened in Texas and would stand to perhaps compete with Tenet in this area, although the two companies just signed a new contract nationwide not too long ago.
Tenet Hospitals Announces Rebranding Urgent Care Services Now “MedPost” -Emergency Room Visits Keep Rising
In addition, not too long ago Tenet bought Vanguard Health for $1.8 billion in cash so there’s some expenditures going out in that direction as well.
This will be interesting to see how this works out with everything that is happening in healthcare right now. If in fact there’s more business leaving the ERs and moving to freestanding centers then the 3 companies bidding on the national contract if one of them secures a national agreement to further cut losses from the hospitalist side and even perhaps cut physician wages even more, and of course that’s the huge fear of all the doctors, plus they have to meet the standards, which we don’t know what they are exactly, of any one of the 3 companies who could win a nationwide bid. The profit margins are very slim for such nationwide contracts as well.
To support the corporate structure of one of the potential bidders there’s going to have to be money taken from the various ERs to support that over head of the staffing company too so those Tenet hospitals could see lower staffing and doctors required to see more patients per hour as well which means a decrease in the quality of care overall. BD
National hospital chain Tenet Healthcare is considering replacing local independent doctor groups with a large national physician staffing company at some or all of its 12 California facilities.
Doctors in Orange County and across the state fret that bringing in an entirely new group from out of state to manage three different sets of physicians could disrupt established relationships between them and their hospitals and usher in a new era of penny pinching that would reduce staff levels and doctors’ pay.
Earlier this year, Tenet notified medical staff at its California hospitals that it was thinking about terminating current contracts with emergency room, anesthesiologist and hospital specialty doctor groups in order to bring in a single company that could provide physicians for all of those functions. It has solicited and received bids for the proposal.
The California Medical Association, physician associations and the medical staff leaders at some of the Tenet hospitals have weighed in against the plan.
“It’s like saying to Coke, ‘We are going to change you to Pepsi. Everybody will stay; they just care about cola,’” Futernick mused. “But I think many physicians will leave, especially if they are part of a group that is bigger and has other contracts. I think some of the physicians will stay, but at greatly reduced pay rate – especially if they have fewer options.”
There is some confusion over the scope of Tenet’s plan. Doctors working in Tenet hospitals said they believed the staffing change would be at all of the company’s California hospitals. A spokesman for Tenet, however, said, “some of the hospitals may choose to remain with their current physician groups.”
Nonetheless, Tenet has at least three large physician staffing companies bidding for the business and ready to jump in: EmCare, a Dallas-based company with $3.7 billion in revenues; Team Health, a $2.4 billon Knoxville, Tenn., company; and Apollo MD, a privately held firm headquartered in Atlanta.