With headlines of economic downturn, health care reform, and decreased reimbursements, many physicians are asking the questions, “Is My Money Safe?” “Should I Change Banks?”The first step to take in answering these questions would be to determine your bank’s rating. To help educate the average depositor, we researched the methodology behind bank ratings. Bauer Financial is a nationally recognized independent bank rating firm. The information that Bauer uses to rate banks is obtained from an approximately 30 page report that each bank is required to file quarterly with government regulators. No bank with assets greater than $1.5 million can be excluded from this rating process nor does a bank pay to be rated or for the rating that it receives.There are a number of factors considered in the rating process including:Capital ratio;Number and value of delinquent loans;Number and value of charge offs;Repossessed assets;Profit/(loss) trends;Value of investment portfolio;Regulatory supervisory agreements;Community reinvestment rating;Historical...

The average pre-deal predictors of anesthesia group merger or acquisition success are, well, average. Economies of scale, increased opportunities, greater profits! If life, even business life, were just so simple.Having worked with countless groups, both within and without the specialty of anesthesia practice, on mergers, acquisitions and other affiliations, it’s obvious that there are other key predictive indicators as well.This article focuses on one of the most important soft, that is, non-dollar, indicators: the impact group culture has on the likelihood of success of the combined venture. Any merger, acquisition or affiliation that does not take into account the variance between the cultures of the constituent groups is doomed, at a minimum, to trouble, and much more likely, to failure.It’s possible to discuss anesthesia group culture from several perspectives. For example, we might view group culture organizationally, socially, or psychologically.But if you allow me to assume that you’re like my clients,...

In these turbulent times for the business of anesthesia groups, in which the pace of, to use Joseph Schumpeter's term, creative destruction, is quickening, it is more important than ever to take a strategic approach to the way in which exclusive contracting and group structure and group functions are intertwined. To simply keep on keeping on with a pure focus on patient care, thinking business success, or even business survival, will follow, is folly.Consider this very instructive example:In the late 1920s, Walt Disney had his first big commercial success with a cartoon character named Oswald the Lucky Rabbit. Disney had an exclusive contract with Universal Pictures for the distribution of Oswald cartoons.  It paid Disney a tidy cut, but not nearly enough. So Disney, based in Burbank, set off on the train for Universal’s headquarters in New York City to renegotiate the terms of the deal. But Universal knew he was coming. And...

Every private anesthesia group in the United States knows that practice management companies (PMCs) in the business of acquiring and operating anesthesia practices are growing rapidly.  This is part of a general acceleration in health care merger and acquisition activity driven by healthcare reform and by the economic uncertainty of the last few years.  Physician practices have become one of the fastest-growing targets; larger entities such as health systems, insurance companies and PMCs are buying up hospital-based specialties with a view toward participating in accountable care organizations (ACOs) and receiving bonuses for improving quality and decreasing costs.Hospitalists, whose specialty barely existed twenty years ago, now number more than 30,000.  Hospitalists attract the interest of venture capital and expanding corporations because of their role in managing acute inpatient care.  Emergency medicine has a long history of PMC partnerships.Anesthesiologists, as specialists in the management of perioperative care, are likewise attractive candidates for acquisition. ...

From day to day, the great majority of anesthesiologists, nurse anesthetists, anesthesiologist assistants and their group practices provide excellent patient care.  Most enjoy comfortable relationships with their hospitals and surgery centers, too. The world of health care is changing all around us, though.  Every anesthesia practice needs to understand the more important changes and to adapt, or plan to adapt.  In this issue of the Communiqué, you will find a number of articles that will help you prepare for the short-term and long-term future. We start with Mark Weiss, Esq.’s Protecting Your Exclusive Contract, Your Practice and Your Profits.  Mr. Weiss aptly shows that the process of negotiating your next hospital contract starts the moment you have signed this one.  The anecdote about Walt Disney’s arrival at Universal Pictures’ headquarters in New York to renegotiate the terms of their deal, only to find that Universal, not he, held the copyright in his cartoon character and...