Sunday, March 21, 2021

From 1099 To W-2 in 2020


Overnight, we morphed from independent contractors to hospital employees as the hospital took over our anesthesiology department. I won't go over again all the details about why our group made the switch, but it was done out of necessity due to the pandemic and the reality of a different set of expectations among younger physicians.

This change brought on many immediate improvements. No longer was there an obligation to work late into the night if the room was running long. If you weren't on call, they almost hustled you out of the OR by 5:00 PM lest the hospital had to pay overtime. Working weekends brought extra pay. The set work hours was a revelation for those of us who had only known unpredictability and exhaustion. My wife even remarked that sometimes it felt like I was only working part time when I kept coming home before the children went to bed. 

Besides having a set number of hours per day, we also finally achieved a contractually determined number of vacation and sick days. As independent contractors, we could theoretically determine our own work hours and take as many vacation days as we wanted. But if we did that, we won't make any money and it's no fun losing your house because you wanted to take a month long vacation to explore the world. Now we have paid vacation days and the mental relief of not worrying about paying our bills while taking time off.

Perhaps the most important benefit we received was health insurance. As independent contractors, we had to buy our own health insurance. This flexibility is nice if you're single with no family obligations. But most of us had to worry about family coverage and Covered California, our state's version of Obamacare, was raising its premiums every year while increasing the deductibles and copay. This took a giant chunk out of our monthly incomes. It became my second largest personal expense, after the mortgage on my house. The deductibles for a family reached over $20,000. We weren't even buying the gold plan, but the least expensive plan we could find that included our family doctors in the network. This was essentially a catastrophic health insurance plan which we avoided using as much as possible. We paid almost everything out of pocket as we never got close to using up all the deductible in one year. Now we have much better health insurance from the hospital. It also eliminated a giant hangup to recruiting new physicians as most young people expect to receive their health insurance from work.

The headaches of running a medical corporation also disappeared. No longer did we have to pay the expenses of a large back office operation. The hospital now was in charge of all the billings and collections. No longer were our incomes held hostage by how successful our collections process was. That was the hospital's responsibility to collect the money, not ours. We got paid based on our hospital contract, not how much reimbursement we could achieve.

Having the heft of a hospital behind us also did wonders for insurance company negotiations. Tales are rife of insurance companies unilaterally cancelling their contracts with anesthesia groups, or cutting previously agreed to reimbursement rates. A hospital will have more leverage negotiating with insurance companies than a little single specialty medical group could.

The advantages of becoming hospital employees became evident when California experienced its surge of coronavirus cases last winter. We again had to reduce the OR schedule as the hospital was trying to preserve as much ICU and regular hospital beds as possible. Unlike the first surge though, our incomes didn't change. The hospital continued to pay us as if we were working full time even though many of us were given paid time off for lack of cases. We anesthesiologists were no longer beholden to the surgeons and their operating schedule.

But I shouldn't make it sound like it's all been wine and roses since we became employees. There have also been deep grumblings within the department about some of the changes the hospital has made to our practice. That will be the next installment of this journey.

Saturday, March 20, 2021

Fee For Service Is Over

The Covid pandemic destroyed countless lives and businesses. Our anesthesia group was unfortunately one of its victims. After almost 30 years of independent practice, we decided that the way we conducted business was no longer tenable. It has been a long time coming but Covid gave our group a final shove into the dustbin of history.

The group was an all physician anesthesiologist endeavor. When times were good, they were very good. It was an old fashioned fee for service practice. Some of us who wanted to make more money could work harder and longer than those who didn't want as much income. Some people made money to buy fancy cars and real estate while others earned just enough to satisfy their vacation splurges. Covid put into sharp relief the shortcomings of this model.

When the economy was put into mandatory lockdown by the government, suddenly the economics didn't work anymore. No work meant no money. Most of us were really hurt economically when our incomes dropped well over 50% last spring. Almost all of us applied for the PPP loans, which we qualified for since we were considered independent contractors. Unfortunately the loans were only a temporary bandaid since we can't live on government loans for long. Luckily the lockdowns started to lift just when the PPP loan money was running out. 

Meanwhile the doctors and nurses who were employed by the hospital didn't see any cuts in their incomes, even though they too were working less (other than the pulmonary, ED, ICU, and other so called frontline workers of the pandemic). When the second surge started to hit and our surgical volume waned again, we knew that our anesthesia group needed substantial help. 

In reality, our fee for service model was terribly outdated and could not survive for much longer. There were lots of problems with a business model that had been stagnant for decades. The most pressing issue was the difficulty we had in recruiting. We had survived by hiring people who really wanted to live in Southern California. That was the number one draw. Though the cost of living was exorbitant, some people were willing to take that economic hit to live here. Over the years, as the taxes and housing costs kept rising, fewer people were willing to make that sacrifice. 

The fee for service model also did not appeal to a new generation of anesthesiologists. Yes you can make fist loads of money if you work hard enough. But younger doctors were more interested in a better work-life balance. They were willing to make less if they could be guaranteed set work hours and regular time off to spend at home with their families. We just couldn't do that with our practice. People were expected to stay until all the cases in their room were finished. It was very difficult to plan any family events as there was no way to know even 24 hours ahead what time you might be able to go home. That was a gigantic turnoff to many young doctors.

Then there was the rising cost of doing business. Our back office was taking a substantial portion of the group's income. There was staff to hire, offices to rent, computers systems that needed constant updating as insurance companies and government bureaucrats kept changing how and what kind of paperwork they needed before we could get reimbursement. It was a constant battle to keep expenses down.

I'm not sure who approached who first, but when the hospital saw the difficulties we were having, they proposed to absorb our group into their system. They valued our expertise as we were active in a substantial portion of medical care. Everything from labor and delivery, surgery, critical care, chronic pain, and many other areas of patient management involved our anesthesia training and the hospital was grateful for it. Therefore they couldn't afford for our anesthesia group to suddenly disintegrate and leave them with an unstable and unpredictable anesthesiology department. I can't say it was a buyout as none of us got a buyout offer. Instead, we became employees of the hospital.

Friday, March 19, 2021

Covid Arrived And My Anesthesia Group Died

Hard to believe that it has been a year since the arrival of Covid in the United States. It has wreaked devastation across the landscape, both economically and personally. Millions of people lost their jobs. Millions more got sick and hundreds of thousands have died. 

It's been twelve months since I've lamented that I dropped out of the LA Marathon that ran on March 8, 2020. At the time, the CDC, Dr. Fauci, and plenty of so called "experts" commented that covid will be no worse than the seasonal flu. How wrong we were then. The devastation was just beginning. 

Little did I know that part of the destruction would visit me on a professional level. At the beginning of 2020, our operating rooms were still running like gangbusters. Our surgical volume was set for another record year. Seemed like it was shaping up to be another very prosperous year for our anesthesia group with plenty of bonuses to go around by December. Then everything stopped.

The government ordered all nonessential businesses to shut down for an indeterminate length of time. That included most of our elective surgeries. Basically any cases not involving cancer or life and death situations were cancelled. Our OR cases dropped by more than 50%. Everybody in the group suddenly became underemployed, working one or two days per week. Our income likewise plummeted to heretofore unthinkable levels. Who knew how long this was going to last.

Reprieve granted April 22
Then in late spring, California's Governor Newsom declared that hospitals can start opening up again as the first surge of the coronavirus started to abate. Slowly the operating rooms got busier. But it couldn't get as busy as it was prior to the pandemic as multiple safety protocols were put in place. Getting every single patient tested for covid prior to surgery proved extremely challenging. Rules for proper testing were fluid and ever changing. But we struggled through the summer as the hospital eventually developed a new pattern of normalcy.

But by early fall, there appeared to be another surge starting to form and our volume dropped again. This was starting to get very scary for every anesthesiologist in the group. We could not maintain our livelihoods based on the vagaries of the action of a virus. What if a vaccine doesn't get developed for years? What happens if many of us with large student loan debts and new mortgages to pay are pushed into insolvency? There seemed to be only one way out of this quagmire. And the answer was something we were determined never to do until we had to do it--we abandoned our medical group and joined with our hospital as employees. 

Sunday, August 16, 2020

What Would Steve Jobs Think About Reaction To Coronavirus?

One of the things about living through a pandemic is that you have a lot more time to do leisurely activity since schools, summer camps, and vacation spots are all closed. Therefore I tried to catch up on some reading. One of the books I read is the biography "Steve Jobs" by Walter Isaacson. It is a fascinating story about the complex history of Jobs and his eccentric personality. I can relate to much of the book as I remember reading about a lot of it as they happened 30-40 years ago. 

I came across a passage that I thought is so meaningful for our current coronavirus afflicted times. Isaacson describes how Jobs was a firm believer in people meeting each other to talk and exchange ideas. When he designed the headquarters for Pixar, he made sure that the structure would naturally lead people to congregate in a central atrium. He even went so far as to initially design only two bathrooms in the entire building so people would have to gather in one area. Wrote Isaacson, 

Despite being a denizen of the digital world, or maybe because he knew all too well its isolating potential, Jobs was a strong believer in face-to-face meetings. "There's a temptation in our networked age to think that ideas can be developed by email and iChat," he said. "That's crazy. Creativity comes from spontaneous meetings, from random discussions."

What would Jobs think about the work from home and online education trends in the country? Many companies, especially the high tech industry in Jobs' own Silicon Valley, have told their employees to work remotely. Likewise, teachers are now refusing to resume classes in school and are staging sickouts. While millions of people are still working or have returned to work, teachers feel they are not essential workers and demand to stay home. This despite the fact the parents and students across the country feel online learning is inferior to real classroom involvement. What's worse, college students have to continue paying exorbitant tuition and fees even though classrooms are closed.

As the panic surrounding Covid 19 continues, are we teaching a generation of workers and students that they should run away from adversity, even if they are the generation least likely to get sick from the disease? Are the students being taught to cower in fear of the unknown instead of striving to conquer what ails society by going to school and returning to work? Steve Jobs, one of the great geniuses of the last half century, would probably have scoffed at this remote learning and work trend. As millions of people at hospitals around the country continue to work daily, despite a hospital being a natural aggregator of sick Covid patients, I can't help feeling that this reluctance to return to pre-Covid normalcy will be with us for a very long time.

Friday, August 14, 2020

Pandemic Paradise

Lot more gridlock now.

I hate to say it because it sounds so callous, but this coronavirus pandemic has made living in Los Angeles so pleasant. Yes I know thousands of people have died and millions of people have lost their jobs. But there are many millions more people who are still working, and that includes most healthcare workers. 

The situation isn't so dire as it was a few months back. At that time, we didn't really know what we were dealing with. Images from Italy and New York portrayed apocalyptic images of doctors and nurses overwhelmed with the sick and dying. But frankly, they were the exception, not the rule. In fact, hospitals and surgery centers across the country lost billions of dollars because they sat empty as patients were too afraid to seek medical care and operating rooms went dark. 

No traffic! Love it.
I wrote about how deserted the freeways were here in the city. As the stay at home orders forced businesses to close and millions of people were laid off, LA looked like a scene from the Twilight Zone. There was no traffic any time of day or night. I could zip down the 405 freeway at 5:00 PM going 80 mph. It was amazing.

Now things have improved. Restaurants have started opening up. I see packed tables socially distanced apart appearing along sidewalks and parking lots as people enjoy their meals al fresco. The hospital and surgery centers are busier than ever as the backlog of cases are slowly getting whittled down. Traffic has even picked back up. At the worst moments in the spring, my commute time was less than half the usual time. Now my commute is back up to about seventy-five percent of my previous time. I actually have to avoid the 405 now during peak rush hour and take local streets again, like a true Angeleno. It's still a vast improvement from the previous gridlock though.

I hope the economy picks back up quickly for everybody so we can continue to live our American prosperity. But for those of us who are working harder than ever, this time is indeed a blessing as getting around town is easier than ever. Now if only more places, like museums, movie theaters, and shopping malls, opened up, I will have somewhere to go during this golden era of LA freeway driving.

Thursday, August 13, 2020

Boston Murderer Gets Life Sentences For Killing Two Anesthesiologists

With all the overwhelming news about the coronavirus and the presidential election, I overlooked a very important story a few months ago. Remember that horrifying double murder of two anesthesiologists in Boston in 2017? Drs. Lina Bolanos and Richard Field, an engaged couple working at Harvard Medical School, came home from work and were confronted by an intruder. They were bound and their throats slashed. The murder, Bampumin Teixeira, used to work in the building as a concierge and had access to the premises. He committed two murders for a simple robbery.

Well justice has been rendered. In December of last year, he was found guilty of the murders and received two consecutive life sentences with no possibility of parole. This doesn't even count the sentences for his other crimes including armed robbery, kidnapping, and home invasion. 

Mr. Teixeira exhibited erratic behavior throughout the trial, including threatening the prosecutor and shouting in the courtroom. He had to be dragged out and watched the proceedings on TV from a separate room. He showed no remorse when he learned of his sentence.

RIP good doctors.

Tuesday, August 11, 2020

How To Improve Your Hospital's National Ranking

US News & World Report recently released its latest rankings of the nation's hospitals. Eagerly awaited each year, it is a source of pride and free publicity for numerous hospitals. A high position in the survey is frequently cited in radio, print, television, and online advertisements, sometimes literally the day after its publication.

Naturally hospital administrators are eager to figure out how to improve their rankings in the survey. This is even more true if there is a rival hospital in town. Wouldn't USC's Keck Hospital love to leapfrog UCLA's Ronald Reagan Medical Center in the LA hospital market. 

While looking through the list, it seems to me that there is an easy and effective way to get one’s hospital into a better position. The US News survey is subdivided into seventeen subspecialties. These include Cancer, Rehab, Orthopedics, and others. Ten of those are surgical subspecialties like Urology, Orthopedics, Neurosurgery, and GI Surgery. So obviously the best way to improve the hospital score is to improve the surgical rankings. And what can the surgery departments do to improve their positions? Hire a good anesthesiology department of course.

Think about what a good anesthesiologist can bring to the hospital. Anesthesiologists can improve patient satisfaction by treating patients effectively for postop pain and nausea. Anesthesiologists can help decrease the infection rate of cases. Through the concept of the perioperative surgical home, anesthesiologists can increase the flow through of the patient through the hospital, allowing the patient to recover more quickly and saving the hospital money at the same time.

To all the hospital administrators who are reading this post. Find the best anesthesiology group you can afford. The increase in productivity and morale in the operating rooms and the surgical units will more than pay for itself as anesthesiologists use our professional training to improve perioperative care and drive efficiency and satisfaction among your patients. Increased US News hospital ranking is just icing on the cake.

Saturday, August 8, 2020

White Doctors More Likely To Suffer Burnout

Here is one white privilege that is rather unexpected. Researchers at Stanford University have found that white physicians suffer a higher rate of burnout than other races. In a survey of 4,424 doctors, they calculated that white doctors have a burnout rate of 44.7%. This compares with burnouts of 41.7% in Asians, 38.5% Black, and 37.4% Hispanic.

Traditionally, primary care doctors have higher burnout than specialists and minority doctors tend to practice in primary care. However the researchers speculate that white doctors have different expectations of their careers compared to others. Many white physicians come from a multigenerational family of doctors so they may fondly remember the experiences of being a doctor from decades ago. By comparison, minority doctors are more likely to be first or second generation. Therefore the current medical environment doesn't feel so different.

Perhaps burnout is really a matter of expectations. If you feel lucky to be practicing medicine because you're the first one in your family to go to medical school, you'll be less likely to complain about your difficult job than someone who attends a family reunion where all the doctor family members gather to gripe about the government, insurance companies, patients, etc. It's all about perspective.

Tuesday, August 4, 2020

Did Medical Racism Kill Rep. John Lewis?


I'm just going to be a little provocative here today. Last week, Democratic Georgia Congressman and Civil Rights icon John Lewis was laid to rest after a brief battle with stage 4 pancreatic cancer. He announced his diagnosis back in December 2019. At the time, he was girding for a fight with the disease, stating, "While I am clear-eyed about the prognosis, doctors have told me that recent medical advances have made this type of cancer treatable in many cases, that treatment options are no longer as debilitating as they once were, and that I have a fighting chance." Unfortunately his fight came to an end July 17, 2020.

Contrast that with two other very famous people who coincidentally were also diagnosed with stage 4 pancreatic cancer recently: Alex Trebek, the game show host, and former Democratic Nevada Senator Harry Reid. Trebek was diagnosed in February 2019 while Reid was diagnosed in May 2018.

Trebek has been very vocal about his treatments. He's been chronicling his chemotherapy with the public routinely, recently announcing his one year anniversary of his diagnosis. He said last September he was not doing so well. He had lost 12 pounds and his CA-19 numbers were still elevated. So he started an experimental immunotherapy treatment on a compassionate use case. Remarkably it worked well. His CA-19 numbers went from 3,500 before the treatments to under 100 now. 

Sen. Reid was also doing poorly with his cancer in 2019. Surgery and chemo had failed to halt the progression of the disease. He then got in touch with billionaire physician Patrick Soon-Shiong and got enrolled in the same treatment program as Trebek. Now, two years after his diagnosis, Reid is cancer free.

So what is this miracle drug that is eliminating stage 4 pancreatic cancer? They are using a medication called Abraxane that in combination with other treatments like interleukin-15 and natural killer cells form a "triangle offense" to eliminate metastatic pancreatic, breast, or lung cancers. The regimen is so new it is still undergoing phase 2 trials in the U.S.

This raises the question of whether Rep. Lewis was offered the same treatment protocol. He was the last of the three to be diagnosed with pancreatic cancer yet he is the first to succumb to it. Both Trebek and Reid appeared to respond quickly to Abraxane, within months. Was Lewis given the same opportunity? It's couldn't be about money. I'm sure Rep. Lewis, a congressman for decades, is well off financially. It also couldn't be about VIP's getting different treatments compared to ordinary people as Lewis is as VIP as it gets. Was his cancer stage much worse than the other two such that it was meaningless to offer him this miracle cure? Is it a coincidence that the two survivors are white men while the black man died from his disease?

Due to privacy concerns we will probably never know the answers to these questions. But it seems to add to the confounding statistics that Black men die at a higher rate than white men for the same diseases, even if they are socioeconomically equal.

Sunday, August 2, 2020

Which Specialties Will Make You Rich?

Most people think that all doctors are rich, right? One definition of rich is somebody who makes more money than you. If that is the case, then nearly all doctors are richer than the average American. But to really understand how well off somebody is, you need to look at their net worth. A high income doesn't mean anything if it is frittered away and there is nothing left to show for it. A Charles Schwab Modern Wealth Survey reported that most people considered a net worth of $2.3 million as a definition of being wealthy. That is a considerably higher bar to hurdle than just merely have a high income.

For most physicians, that is a difficult, though not impossible goal to achieve. Obviously if you're just starting out, $2.3 million in net worth sounds like a pipe dream. But as your career flourishes, the goal gets closer and closer within your grasp. And certain specialties have an innate advantage in achieving high a net worth.

While the average person thinks $2.3 million defines the wealthy, physicians have a different point of view. Most doctors would probably be happier with $5 million in net worth. Can't show up at the country club driving a Mercedes when your colleagues roll in with their Bentleys and Aston Martins. So here are the ten specialties that have the most doctors who have a net worth of over $5 million courtesy of Medscape.

1. Orthopedics, 19%
2. Plastic Surgery, 16%
3. Gastroenterology, 16%
4. Cardiology, 15%
5. Oncology, 15%
6. Dermatology, 15%
7. Otolaryngology, 14%
8. Urology, 14%
9. Radiology, 13%
10. Ophthalmology, 13%
*11. Anesthesiology, 12%

Medscape Physician Compensation Survey 2020
Medscape Physician Compensation Survey 2020

Naturally most of the fields in this list are also the same ones who have the highest incomes. But making a lot of money doesn't guarantee that you'll end up with a high net worth. If you spend all your money on fancy cars, bad investments, and multiple wives and children, you can still end up a pauper despite making a six figure income. I know doctors who are working well into their 60s and 70s because of poor life choices over the years.

While this list looks impressive, fifty percent of all physicians have net worth of under $1 million. Since there are no ages associated with these statistics, it's probably safe to say that most of the doctors under 50 years don't have a net worth of $5 million. In fact, in some fields like pediatrics and family medicine, over 40% have net worth of under $500 thousand.

So all you millenial physicians just starting your careers, keep saving into those tax deferred accounts and other wealth building plans. Five million dollars may seem impossible to attain at your current situation, but keep plugging away. Compound interest and six figure incomes will work to your advantage in the future.

* I just had to add anesthesiology to the list to show how close we are to the top ten of wealth generating specialties.