“My entire career, we’ve constantly had this threat over our head.” That is how Dr. Dahle, host of the White Coat Investor podcast, described life in a small democratic group of emergency doctors, and it is why a group in Eugene, Oregon, caught his attention.
The Eugene emergency physicians fought off a corporate takeover attempt and won. On episode 477 of the podcast, Dahle said that was the interesting part. Losing is the norm. “Small democratic groups of emergency doctors across the country have been losing their contracts for decades,” he said.
One customer, ninety days
Dahle has worked in such a group for 16 years, since he left the military in 2010. He went looking for a partnership job and found one. Technically the group is a partnership and he is paid on a K-1. In practice its business has one customer: the hospital it contracts with. Patients get a bill from the hospital and a separate, smaller one from the emergency physicians. Both sides can end the contract with 90 days’ notice, so even a five-year deal is never really longer than 90 days.
Doctors in other settings have more room. A concierge primary care doctor can have hundreds or a couple of thousand patients and is not tied to a single entity.
The kitchen scheduler
Emergency medicine has an old word for the people who held those hospital contracts and hired doctors to fill them: kitchen schedulers. All they did was schedule shifts, Dahle said, and they kept a large cut. “The docs were doing all the work, they were taking all the risk,” he said. “And yet the kitchen scheduler was making a whole bunch of the money.” The cut ran from 5 percent in some cases to as much as 50 percent in others.
Some schedulers added a second hospital, then a third, then hundreds. Today the biggest contract management groups include Team Health, Envision, Vitu, USACS, Core Clinical Partners and SCP Health. Some are owned by one doctor, some by several, some by private equity. None, Dahle said, are owned by the doctors working the shifts.
That history split the specialty in two. The larger and older body is the American College of Emergency Physicians. The smaller American Academy of Emergency Medicine, in Dahle’s words, is “in a lot of ways the conscience of emergency medicine.”
Ownership and burnout
Roughly 75 to 80 percent of doctors are now employees, he said, and ownership is shrinking among dentists too, where only about 50 percent are self-employed. Dahle links that trend to burnout. “I do think the decreasing percentage of physician ownership of their practices is contributing, a major contributor to the rising rates of burnout,” he said.
His remedy is political as well as personal. “I like docs owning their job,” he said. “Maybe it’s time to work with our state legislators and get laws like this passed across the country so physicians can be in control not only of their businesses, but of healthcare.”
The rest of the episode turned to listener questions on rabbi trusts, irrevocable trusts for estate planning and asset allocation. One line stayed on the money side: “Don’t let the tax tail wag the investment dog.”
