This week, I’m joined by my friend Dr. Aalap Shah. Dr. Shah has served as an anesthesiologist in many different practice models. We talk about his experience in running an anesthesia company in Southern California. He talks about many of the complexities of operating a practice. Additionally, we discuss some of the challenging parts of navigating the political landscape within a hospital administration.
This week, I’m joined by my friend, Dr. Aalap Shah. Dr. Shah has functioned as an anesthesiologist in many different practice models. And today we talk about his experience in running an anesthesia company in Southern California. He takes us behind the scenes to examine many of the complexities of operating a practice. We had really interesting discussion about how contracts are negotiated with hospitals and some of the challenging parts of navigating the political landscape with hospital administration. Much of what we discussed today is really embedded in the fabric of anesthesia finances. And these are really important concepts for physicians to understand if they desire to track the flow of dollars related to their specialty through the healthcare system, we covered some really awesome content this week, which we’ve never broached before.
And I’m really excited to share it with you this week. Hope you enjoy hello and welcome to episode 70 of the anesthesia and pain management success podcast. I’m very pleased to have a returning guest, Dr. Elop Shah Lopez, an anesthesiologist, and a business owner, and has taken a really interesting path. I had him on back in the teens to talk about his career as a, an entrepreneur and anesthesiologist simultaneously. He’s continued on that track since we’ve spoken and has a lot of great experience from which we’re going. We’re going to draw today and talking about some of the challenges faced by business owning specifically like anesthesia practice, business owning physician. So Dr. Shah, thank you very much for being here.
Dr. Aalap Shah (01:53):
Thank you very much, Justin. And again, thank you for having me again on your in your delightful series you know, since we’ve last talked I remember the, the content where we talked about before starting off as an independent business owner as an individual physician anesthesiologist going and trying to pave a way compared to the confines of a traditional private practice of group practice. Since then I’ve expanded on the role going from simply as an independent practitioner, independent anesthesiologist to a partnership and running the group with like-minded individuals that are also focused on the same end points giving high quality care in a cost-effective manner to the areas that need the most medically underserved areas, especially around Los Angeles.
Awesome. And I’m excited to unpack that with you today. One of the things that is a strong, a personal passion of mine, and the reason this podcast exists is to equip physicians as much as possible to maintain agency over their own careers and their own decisions around how they practice and around compensation and around the business functions of the practice of medicine. And so connecting with you you know, early on has been a real fun thing for me. And I’m really hopeful that today’s content is going to give our listeners some tools for people who are interested in this, like, you know, running an anesthesia company, or even being like a, a solo anesthesiologist who contracts on their own behalf to be able to ask some important questions. So tell me a little bit, maybe actually, before we dive into the, what you just described, take a minute and just talk about that first, you know, year or two of attending hood and what D what does being an independent anesthesiologist mean in that context?
Dr. Aalap Shah (03:46):
A lot of that, you know, I remember touching that on that our previous discussion, but to summarize here, a lot of that requires, first of all, the logistics and the medical legal background setting up as an individual corporation, for example, in the state of California as an S corporation. And again, there’s a whole separate discussion about W2 10 99, which always seems to come my way whenever I talk about any practice related thing, it’s very relevant, but it’s important for people to know that W2 I nine as a text set up was very different from that is how you illegally set up the practice in the state of California. So I remember we touched on that briefly last time after that, a lot of it is similar to that, of running any kind of business, especially in the United States, going out there, marketing yourself, networking having good quality people skills being able to work and have the kahunas, lots of lack of a better word to approach administration with ideas, you group leaderships with ideas. You know, a lot of times, most people including myself, started off in the constraints of working in a private practice. And although a lot of people tend to take the, keep your head down, let’s make partner method. I encourage people to not do that, especially in this day and age where even group contracts that are long lasting that are, you know, they’re, they’re, they may be, you know, a losing game at some point, and to really keep guessing the big questions, keep showing initiative and keep working with it.
Did you, yeah. Did you have any role models or people that sort of held this option out to you? Cause I know for a lot of, you know, residents and early career attendings who kind of come up through the, the anesthesia training track of med school residency, and then getting that first job doing what you describe is pretty uncommon. So it’s, it’s interesting to me that you kind of became aware of these options and these important questions. So early in your career
Dr. Aalap Shah (05:51):
Role models, all along the way, I started off with academic role models when I was in residency and training. But when I came out to California and I took the, you know, I took the goals, I’m going to go into private practice and learn for myself. When I first came to California, the first group that I interviewed with was a community group is actually the same group for which I obtained the contract for the hospital several years later. And although I didn’t sign with this group the first time I kept my connections with them. And after a year or two, after I left my first job I actually joined this group and I started working with these individuals and a lot of these individuals themselves had inherited this group and were, you know, again, young collegial group of people trying to make it work in the community.
Dr. Aalap Shah (06:43):
So it was really working under their helm for a good year, year and a half where I really learned about what it’s like to be running a group. The ends of your compensation reimbursement that’s received by the group and pinups that each individual anesthesiologists are [inaudible] working in the practice. The problems associated with patient care people trying to jump, you know or cut corners where other and, you know, provide care for patients who need further workup and all of the things that you typically say. And so I learned that he was working under their helm and that actually in July last year, just shortly after we talked last my colleagues had actually stepped away from the hospital and having worked with the administration. I actually created a proposal and using my previous colleagues that were my role models. They actually mentored me. We created my first proposal, which had incented the hospital, although it was initially rejected. They did come back to us and we did go forward with that proposal.
Yeah. Do you have any experiences kind of from early on where you realized you began to realize the whole different categories? They had to start thinking and as a business owning physician, rather than just a clinician only, Oh, sorry.
Dr. Aalap Shah (08:03):
So again, a lot of that came from the independence that was really thrust upon us during the first year. I think a lot of it really comes down to a different pay structure and being comfortable with it. In any groups that I’ve worked with or run, the biggest question always comes up is how is a group being compensated? And then how am I being compensated as a person working for this group? And then a very relevant question is how long lasting is this? How strong is your contract? So that was really, you know, those three con questions were my three really only questions. How do I get set up to be someone who works in a private practice compared to your traditional W2 employee or non S-curve 10, nine, nine working for a private practice after that? Once I did just start my practice last July, a lot of the questions, you know, came up as to first of all how do I manage my group’s daily operations?
Dr. Aalap Shah (09:07):
Every profession is different, right? Whether you’re financial planning, whether you’re an engineering or software industry, you’ve got something, whether it’s a huge time consuming or money consuming factor that really encompass it really is the essence of your job. And I hate to sort of say it, but it, when it comes to contract and anesthesia groups testing, we we’re technically glorified anesthesia staffing services. We staff the hospitals with high quality providers that can provide the means to make an ends meet in other words, provide care so that surgeons and be happy in surgeries can be done in a safe manner, in a time-sensitive manner in a way that keeps the hospital profitable. It keeps the patients safe. It keeps the surgeons happy. So when I eventually realized after many painstaking experiences that that’s really the main tenants of what’s hospital sees us as a role.
Dr. Aalap Shah (10:07):
Then I really started transitioning myself to be like, okay, well now we really have to deal with the intricacies of staffing. And that’s where I started learning about the real business and things that affect any profession. You know, whether it be, you know, someone who is staffing a fast food chain or staffing the hospital, really the issues are the same. And I’ve actually talked with colleagues in different industries. So really I can, I can touch on some of those things, but really when it comes down to staffing, we’re talking about call schedules. We’re talking about people who don’t want to work with type of surgery or type of surgery. And we’ve got people who need to go home early to take care of their parakeet, and you’re having to go find someone to take care of them. I kid you not. And I think I’ve told you the last year when I was trying to get married, having to come and take over for someone who didn’t want to take the call and was like, Oh, I’m too tired. I want to go home. And I have to be understanding of that, right? You don’t want to call it. Who’s too tired taking call. You have to really, really learn that you are taking care of glorified staffing service, which is fine. You’re experts to the experts, specialized trade. But you still in any other profession than any other day, you’re still 24 seven they’re having to make ends meet where other people can not. That’s what I learned about the business.
So with the different places where you were, you know, running essentially an anesthesia staffing company, as you described it talk about sort of how you, how you went from, you know, a private practitioner in, in the, the, sort of the profile of that role to now I’m running a company. I have maybe a couple of docs, maybe a couple of CRNs and I’m trying to contract with hospitals, surgery centers, other sites service, to be able to, you know, that’s, that feels like a big chasm there. Can you talk about that transition?
Dr. Aalap Shah (11:58):
Exactly. So let’s talk about the chasm. The chasm typically comes in the form of a request for proposal or RFP. Essentially. This is in the a term for when a hospital is inviting another group to come in and provide services on their behalf to help with their own operations. This is in contrast to what we’ve been traditionally thinking of, where someone has employed directly with the hospital, and there is no glorified anesthesia service or any, any, any group in terms of the contract of amenities services group. So that was really the gap in terms of coming down and creating a proposal and especially creating a proposal for a medically underserved area. I want to go over the major tenants of this, because this is where you really have to make the gap. So what a hospital was asking for in a proposal is really an all at the end of the day, they’re asking for a number, what does number is how much money that the hospital needs to pay your group a day with some caveats, whether it be calls or other things that you want to add in, in order to make your group run.
Dr. Aalap Shah (13:06):
Now, the business side of here is that you have to know, first of all, what the group is bringing in. You have another pair mix of the hospital that’s information that can be garnered from a mentor or from a billing company. In my case, I was lucky to have both a mentor that was able to talk to me about what this hospital was like as well as the billing company is really well use a billing company in Southern California that was voting to the billing for the hospital. And it was able to provide me the payer level of data for this hospital. So once I know what has led to run this hospital in of this anesthesia services, in terms of number of operating rooms, calls, types of services, I then combine that with the information I get in terms of how much money we’re getting from our insurers or payers from the cases that we actually do.
Dr. Aalap Shah (14:02):
And realistically that’s actually the hardest part. I’m going to touch on that in a second, and then combine that with the number that we think we need from the hospital in order to make her group run and running in a sense that it makes sense to me to take the time and energy to do so that’s the number they’re looking for. And that number is usually a per daily rate, or it can be done per month. So that’s one of the biggest things. That’s really the most important thing that they’re looking for. And so obviously you don’t want to just slap a number down on a piece of paper. You want to show how you come to that. So next part is coming up with, all right, so I know what money’s coming in. And in order to justify what I need from the hospital, you know, I’ve got X plus Y or Z, you know, we’re going to justify the why components.
Dr. Aalap Shah (14:49):
I need to justify my staffing. In other words, I need to justify my team, how many people on what to have there per day, who’s going to be on call, but more importantly, and this is the thing that people continue to struggle with with hospitals is determining the fair market value salaries, proposing them and deriving your numbers from that. And this is very important because not a lot of groups do this. I’m finding the competition of groups, for example, that want to come in and just underbid, or have no bid at all. They, they, they require zero money from the hospital and they cover the money to cover the hospitals that the staffing with money from other hospitals or they take a loss, which is what a lot of private equity firms do, you know, for a hope that they’ll have a bigger gig several years down the road.
Dr. Aalap Shah (15:39):
So that is one of the things that we have to deal with when we have to justify that and strongly. So as to why we are having fair market value salary is, and not the lower salaries that previous groups have embedding and with the hospitals have been previously used to lastly you know, why she doesn’t really the biggest thing and I’ll summarize them for you here is determined, fair market value determining the number of staffing solutions and I suppose, anesthesiologists and nurse anesthetists in terminating their pair mix and how much money technically is coming in per month taking into account. You know, for example, the coronavirus epidemic definitely impacted us. And obviously from a business sense, then taking them how billing expenses first year, second year fees, cashflow, and obviously last, but definitely not least you’re on a salary you’re on directorship stipend. So those are all elements that come into the puzzle. And those are all the things that are needed in terms of being comfortable to make the jump from being an independent anesthesiologist, working anywhere to go in and even thinking about having your own group, you have to have a sense of all those things before you go and you try to obtain a contract.
Got it. And that sounds, there’s a lot there. Obviously I want to unpack a couple of those items specifically. So we talked about payer mix and this is a topic that’s come up a lot in the show, maybe for our listeners who have heard, Oh, good payer mix, bad payer mix. They’ve kind of, this is a phrase that we hear and we understand like, Oh, there’s a government payer, there’s a commercial payer. There’s a difference between those talk a little bit about how that applies for you and anesthesia contracting and the types of situations you’re looking at. And maybe give a couple of specific examples.
Dr. Aalap Shah (17:27):
Absolutely. And I want to preface what I say here. And I’m going to make a strong point of it that what we talk about here is not covered in most residency training programs. A lot of people, including the program that I work with right now have come up to me and I’ve actually created the same trickling for them as well, better with the department. So when we talk payer mix, first of all, payer means insurance. The patients insurance, a payer mix basically means that in a practice you’ve got patients coming in that are represented or representing multiple insurances. They can be regular straight up insurances, such as Medi-Cal Medicaid. They can be private and shares such as your EPS, PPO, blue cross Cigna. And then you can have a little bit of a cross you’ve got managed cares, and IPA’s basically small and local groups that created sort of contracts with terms of insurance companies to provide subsidized services.
Dr. Aalap Shah (18:26):
That’s also a level of competition for us. And so you’ve got know you’ve got a whole range, you’ve got County health plans, you’ve got an end on one end. You’ve got people who come in or self pain, people who come in and pay cash for services. All of these things make up the payer mix. And when you average it out, these are numbers that you need to know in a number of patients in proportion of patients that are represented each payer in order to get to your Z the amount of money you’re getting in from collections. So let’s talk about that. Martin groups, our group so far has been focused on medically underserved areas, which really focused on low cost paramedics. We’re talking about Medi-Cal Medicare and a lot of the managed care services. So I’m going to give you some specific numbers and examples.
Dr. Aalap Shah (19:16):
Again, this is really high yield stuff. So please pay attention. When it comes to, especially in one word thing, actually a lot of these numbers are also based, not just on you know contracts between billing company, hospitals and insurance, but also significant geographical variation. So the numbers I’m gonna give you are based on California, specifically Southern California. So when we talk about Medicare Medicaid, which seems to be a name of the game, more patients represented these every single day and urge to provide care for these patients. We’re talking about pay the lower cost. And when we in terms of collections have come in in anesthesia, we, we look at units or unit value or overall a relative value army. You relative for unit value or relative value of a unit. So that easily is made up of three things, a basic unit, a time unit and a risk unit.
Dr. Aalap Shah (20:20):
The base unit depends on the type of case that you’re doing with more complex cases like spine cases, neurosurgery, transplant cases, having higher base case based units. You have a time unit, which has done slightly different, but mostly one unit for every 15 minutes of anesthesia time. And then you have risky units or modifiers based on, is this for example, complex patient ASC three plus, are we turning the table? Do they feel avoidance doing special lines that can kind of is monitoring? These are things that we now you have to know, we bill for it, but not necessarily collect for, and I’ll touch on that a little bit later. So this base plus time plus a risk creates the number of units that you get for a case. Okay. So that’s what we know. And so that’s one piece of data that we have to get from a number of cases that we are doing in the hospital.
Dr. Aalap Shah (21:19):
So going back when you’re grading the proposal, in addition to your payer mix, you also want to know what type of cases and how many cases you’re doing. Now it comes to the insurance value. So there’s a dollar value. It’s very different for each insurance, for example, when it comes to Medi-Cal Medicaid and it could be looking at 11 to $14 a unit. Okay. to put that in perspective, when we look at some of our higher pain shirts and you have to understand that there is groups in as hospitals that really Brittany, you know, they’re the cream of the crop. They haven’t better payers. If you may, we’re talking about as high as 40 to $50 a unit more realistically, 30 to $40 a unit here in Southern California. So think about the numbers. And I just told him, I just told you 11 to $14 and eight on one end, and I told you 30 or $40 a year on the other end.
Dr. Aalap Shah (22:15):
Yes. And that’s three, it doesn’t magnitude three difference. So if you can imagine, you know if you had all commercial payers, you might not need any stipend from the hospital and find the number that you requested daily, right. That I was telling you about human idea, anything, as a matter of fact, if you go to surgery centers that just happened recently, shirts, oftentimes groups are paying your status to work there. You know, people will be sending fruit baskets and flowers and candies, and just to keep up the good rapport or, you know, some places you pay, I mean, which is actually typically illegal, it’s a kickback, but think about it it’s very different from the community setting, which, where I’m focused, but we have much more of a lower cost units. And so, you know, we might be dealing with an average of $17 union.
Dr. Aalap Shah (23:06):
All things considered, considering a lot of these hospitals are almost half or more, 60% Medi-Cal or managed care, which are getting local groups or local insurers that then take care or extensions of the Medi-Cal Medicare plans. There is some variation when it comes to, and this is another topic I’d definitely want to touch too, in terms of the type of we call provider. And I hate that term. It’s an anesthesiologist they’re semesters. It’s very daunting to hear this, but you must know that the vast majority of insurers do not differentiate between anesthesiologists and anesthetists. So they don’t know it was in CNA or an anesthesiologist doing the case. Medi-Cal Medicaid might be one of the few that do, and they pay $2, a unit list. So $9 a unit instead of $11 a unit. So I gave you a little bit information there, which can kind of give you a little bit of the frustration that groups must feel when they’re caring towards the lower members.
Yeah. Before we do that, let me, let me just briefly kind of rehash to make sure that I and our listeners all understand this. So especially in the RFP process, part of what’s going through your mind is how much revenue, how much money can my company make from a hospital engagement based on the payer mix, based on the volume and based on the complexity of the procedures. So there, you know, to use simple round numbers, there’s a hundred patients a day. And the average I guess like number of units, which is a function of the complexity is going to be, I don’t know, five units per patient. So there’s 500 units. And that yields as a function of the payer mix, you know, five units per patient, 500 total units and maybe $17 per unit is that’s the revenue number. So, so what you’re doing then is you’re trying to understand how much is in play in terms of total revenue. And then how can I competitively you know, make a bid for that business in a way where I can get enough money to pay my people and keep the lights on,
Dr. Aalap Shah (25:16):
Give an example, actually, I’m missing what you just said, and I’ll boil it down to that of a day. So let’s take your example of, let’s say we have a hundred patients and let’s say that we expect a bill between all the cases, you know, let’s say about, you know, 15 units per patient in a day. So that comes out to about 1500 units a day. Okay. So I know that of those units that I’m getting from insurers, the $17 a unit. So that’s my X right there, right? So like was even X is my 17. I know my Z, I know that in order to make my group run in order to pay the guaranteed salaries, I’ve been to that I’ve prayed in my group model. I need to be making about $32 a unit, a net. Okay. So I know that I’m getting $17 a unit.
Dr. Aalap Shah (26:07):
So the Z minus X equals Y 32 minus 17 equals 15. So I need to be making, or I need to be receiving or rather property. I need to be subsidized above $15 per unit. Now there’s different ways you can go about this in your proposal. If you have, this is where the business comes into play. You have to be willing to take a risk, be like, Oh, I’m making X amount of number of units. And I had to take, let’s say it’s a rainy day and I’m not making as many units. And I have a state number of people there. I know I’m taking a little bit of loss, so I might need little bit more than $15 a unit. So you start adjusting the numbers based on the variation, seasonal variations, other services offered things seem to say, great, Oh, we’ve got some anesthesiologists within the nerve blocks. We’re going to be building more units. This is great news for us. So all those things you have to take into account because you need to hit that 32, maybe three, three, and one make any kind of profit, you know, or no reasonable profit for your group. And so you have to be able to get that number and you use all these things that you play, your insurance, another cases who can do additional services, value, added services, like miracle box post-op checks, paid services and all that know.
And it’s important to point out that this XYZ, I really love this basic algebra. It’s taking me back to like my seventh grade math class for that Y variable, what you described as the subsidy. This, this is like, this is mathematically describing how sort of out of whack, this is that the cost of providing anesthesia services is what you can earn doing it, plus a bunch of money that the hospital has to throw on top in order to pay the people to do it. And I think part, one of the things we’ve talked about in the past is CMS setting reimbursement rates for all the different specialties. Anesthesia is one of them. And actually this year is getting cut 10% again, year over year, which is absolutely nuts. So if we in a perfect world, there would be no subsidy because the anesthesia services themselves would reimburse enough to be able to cover the costs of the people doing the work.
Right. But because of CF and there’s, this is, it gets political and weird, and this is certainly beyond my core area of expertise. But what we see is that because CMS continues to cut reimbursement, that subsidy required from the hospitals is bigger and bigger and bigger, meaning the hospital gets paid on all their anesthesia services. And some of that goes to the anesthesia group, and then the hospital throws another 500 or 750 or a million dollars on top just to be able to make things work. And so that variable, Y that subsidy is actually the token. It’s the number that an RFP is kind of being negotiated around. It’s like, well, Dr. Shah’s group needs a 500,000 subsidy, maybe this other group they’ll claim that they only need a $200,000 subsidy. So that’s where the difference in the proposals is often manifest.
Dr. Aalap Shah (29:12):
Once you have proposal, even if you have the contract it’s about maintaining it in increasing or increasing the understanding about that, why you brought up a great point for example for everyone to know medical Medicare reimbursement is decreasing yet again what that means is practices like mine, that, that received quite a bit of collections of take care of a lot of patients who are represented by these insurance. We’re going to be receiving a little bit less collections. So you would expect that, Hey, if you’re receiving, you know, 10% less for, you know, let’s say 50% of our patients are Medi-Cal that we would need about a 5% increase in what the hospital gives us for that why the following year, no that’s likely does not happen. Most groups or most hospitals will really look to have groups to try to decrease their subsidies over time and from a business point, that absolutely makes sense, right?
Dr. Aalap Shah (30:10):
You bled to, you want to be more productive as a group. You want to bring in more surgeons, more patients for long-lasting relationships. You want to bring in more value added services to yourself. So you can decrease what you asked for the hospital. But to a certain point, you can only get to a certain point where you increase your productivity. As you’re very, very well known, you can sacrifice quality of patient care. So there is a limit. And so we have to help hospitals understand that, Hey, they’re going to continue to get great direct subsidies from the government, but they don’t understand that we’re going to be getting less from insurers that are sponsored by the government and that there is a need to pay more, and they have to understand that they want the same level of quality of care. Unfortunately that is, it’s a losing battle.
Dr. Aalap Shah (30:58):
In most cases. We do have a lot of groups that come in and try to do the opposite instead of increasing the hospital’s understanding of why the, why has to go up. They’re like, well, let’s go down it. If you give us more hospitals, we give us this contract. I can come down. Think about if you have a big practice, which I do not which has multiple hospitals and surgery centers. You can, you can make that work. You can go propose a lower rate. Now, I didn’t know that when I proposed to the first hospital last year I knew that I was also one of the cheaper, I was probably the cheapest better. And I knew that I would be so because we don’t on one side, we’re dealing with people who want to underbid verus, but then you’re also dealing with the bigger companies that have higher operating expenses that actually do care about, you know, putting the fair market value salaries there, and then, you know, doing whatever it takes to make the profit off of that.
Dr. Aalap Shah (31:56):
And that’s a whole other topic. And they were much higher in terms of your daily bids, almost orders of magnitude higher. So I needed, I was trying to go for a sweet spot where it was something realistic. It was something that would keep you competitive against bigger companies. You might have a smaller company. I can deal with a lot more of myself than like a 200 people company where 150 of them are all administrative. Again, administrative cost tend to be the biggest. And so I kind of knew these things, Justin going into it. Unfortunately it is every year. They still want to keep or decrease that number of, for the group or conversely find ways to increase their own or volume. But again, that might increase some of our patients, which are pain less than are needed co Valley, and we still need stuffs to use for those patients. And so a lot of his groups find that, Hey, we’re increasing our volume, we’re getting more patients, but we’re not getting the increased, the incremental increase in subsidy needed for that. And they start taking a loss over time, instead of being able to grow with the hospital and grow with the increasing surgical volume, they tend to get left behind.
Yeah. So you mentioned that this PR this model presents some challenges or frustrations for, for a group in your position. Talk a little bit about how that has played out, how it played out in this situation.
Dr. Aalap Shah (33:22):
Yes. I’ll talk about a couple of things. I don’t mention the coronavirus. I mean, we cannot, we cannot go without the top of that talking about the number one frustration was day one. So the first professional was not so much from administration, but was from, again, we’re a staffing group. We have to deal with the issues. So actually, I’ll be honest with you. I had a nurse anesthetist. I was hired to work with me that decided not to work with me two days before. And so I remember working 24 seven for 11 days in this hospital while I was trying to re hire and hire other people. So the frustrations of people who don’t want to show up are just, you know, typical things, you know, people who’ve got professionalism issues, then you’ve got the issue of clinical competency.
Dr. Aalap Shah (34:12):
And this is really the second thing I know I talked about the staffing solutions, but clinical company. It was another thing. And this is sad because, you know, I’ve been working with anesthesiologists again, we’re trying to protect our tray as EDIS physiologists, but I see a lot of them not being able to do simple procedures, important procedures like epidurals and spinals for laboring pregnant patients in the community. And this is significant. This is a very big problem because not only is obstetrics and labor and delivery, a big portion of every community hospital is a cornerstone. There’s also a significant amount of risk associated with these procedures. So there’ve been a number of times where I have to come and rescue or ever take over a case and have to do something after there was significant concern that my colleague was failing with the procedure, or they simply were just doing it improperly or very unsafe.
Dr. Aalap Shah (35:10):
So dealing from my own group with professionalism, staffing, and clinical compensations, then from an administrative portion, the frustration issues are dealing and what I’m still dealing with as being able to deal with difficult personalities and the patient’s safety issues. Again, we have to be able to deal with, you know, people that are sad, angry, frustrated, you know, that’s the name of the game happens. I ended up, I have no problems with that. What I do have problems with is when it comes to patient safety issues, when you’ve got what I call the breadwinner surgeon and a small community hospital that brings in about 40% of the volume. But it’s causing all of the safety issues. I am like, we’re literally like cringing right now, thinking about the experiences we have to go through, but it was frustrating enough that we actually did not renew the contract with this hospital, the specific hospital exam.
Dr. Aalap Shah (36:08):
And there were significant issues that happened thereafter. And it was one of the things where, you know, we continuously had to, you know, continue to stand up for me group, but then it had to deal with, you know, administration being like, okay, well, your provider doesn’t want to care to patient. Who’s going to take care of the patient or this patient’s been here. We need to do this a case on a Saturday when we’re not supposed to. And we were asked to continuously, you know, bend backwards or, you know, break medical staff bylaws and do things to cater to surgeons. So this is really the biggest thing is that we’re a catering service to ministration the surgeons over on top of the professionalism and clinical competency issues that you have to deal with the community.
Talk a little bit about as much as you’re able to kind of the, the operating room dynamics and the sense of responsibility that you have for patient safety and the complexity of dealing with that responsibility. When you’re in an O R with a surgeon, who’s the big breadwinner who basically gets potentially like whatever the administration, the administration wants to keep them happy as somebody who’s driving a lot of volume talk, how do you navigate that as a business owner, as a physician? That sounds very complex.
Dr. Aalap Shah (37:25):
That is, and that’s in full transparency. It’s usually, you know, some of the role of most anesthesia group, because you’re always going to have a difficult personality. It just is. And you have to be able to deal with that, but you have to be able to draw it a lot. Now, when you’re, you know, I I’ve lived this entire last year, my, my, my colleague and I who are both knee or with a specific surgeon, I’m going to have to deal with these issues. You know, have a list of any civil complaints, if things sent to, you know, medical boards and stuff, and, you know, peer review committees. And it was very frustrating, you know, when you’re dealing with it and you don’t feel that your voice is heard even by your own other physicians that are, you know on the medical staff with you, it’s extremely frustrating and scary when you know, you, even, your colleagues are in the room, dealing with a specific surgeon and your decisions are they can be.
Dr. Aalap Shah (38:24):
So some of them can be of harsh personalities, which is fine, but the, this is very important for you to note just the most difficult thing I’m dealing with are assertions that take away your, to self-govern has occurred. What do I mean by that in the, or we ha we have to be at the helm of the ship. If there is a patient safety issue, we have noted first, cause I can guarantee you these community hospitals, nobody else will. And we have to speak up and we have to say that, Hey, this is not safe. We need to do a, B and C before we bring patient into the room. However, if we’re doing that, especially if you’re doing that with other nurse anesthetists and everything, a lot of the surgeons will not like that. A lot of surgeons are used to people just keeping their head down and just, you know, crossing their fingers and nothing bad happens under anesthesia. So then when I bring in a group of struggle with individuals that actually wants to say something, we run into a lot of problems and it came to the point where, you know, the surgeon is where the specific surgeon who really only one was basically ignoring us, telling everyone in the, or to ignore us while we were in the room with the patient doing things like willing to patients in trying to take over our care overstepping boundaries and taking away our ability to self-govern the most important thing.
Did that surprise you when you experienced that? And it was it persisted.
Dr. Aalap Shah (39:50):
So I knew something was coming into it, but with this specific surgeon, this is way, way above. I don’t think I’ve ever dealt with anything like this. But I have dealt with other those surgeons and I, it’s a walk in the park compared to my experience last year, but regardless, I also have to think about when my colleagues are going through when they are taken care of. And it is daunting because when someone’s mad, when someone’s angry it makes you do the opposite of your job. Our job is supposed to be visual and to have a strong voice, if we’re scared, you know, I remember my first year as a training coming out of training, I might be intimidated and I might not want to say something, or I might tell somebody else. And the chin, you know, communication gets dropped somewhere.
Dr. Aalap Shah (40:33):
So this would come very, very scary in a situation with lots of things that changed in decisions are not willing to communicate effectively with you. And then you’re wondering, you know, how far can you stretch your own boundaries to safety? And before you, you know, say something that can hear it takes somebody, you shouldn’t have to do that. You know, you shouldn’t have to be worried about irritating the surgeon. You shouldn’t be worried about the patient and the patient only. Unfortunately I can tell you most of our job, like I said, we’re in glorified staffing solution. That really, you need to make sure our surgeons are happy. We have to make sure news stations happy and the patients can be happy. And honestly, that’s the most important thing. And hospitals will tell you that. I can tell you the last year I, I pride myself on this. We had our only complication was having four patients with postoperative nausea, no other complications. I can tell you the hospital doesn’t care about that at all. And you know, they were focused on the number phone calls they were getting from a surgeon on the weekend about, you know, why we were intervening in her care. Yeah.
And this was a big enough problem for you that you basically said this isn’t worth it to allow these patient safety issues to persist under our watch. So,
Dr. Aalap Shah (41:49):
I mean, I spent thousands of hours, thousands of hours doing what I call the value, adding services. I took over to supply chain management, my colleague and I actually helped them hire their own HR director. A lot of these community hospitals, you know, can’t even, you know, have issues with their own nursing stuff. It didn’t have a single full-time nurse in the operating room. You can imagine how difficult that is, and then having to integrate your group, trying to propose changes that are long lasting. None of it’s going to be long lasting if the owner, if you don’t have a good peri-operative team. And I guess that’s another frustration that I forgot to mentioned was not having a good perioperative nursing staff at one of these hospitals, at least where we could have luck, you know, things that actually stick.
So there’s obviously a lot to learn here and a lot that I’m sure if you’re doing RFPs in the future, you’re gonna know a lot more questions to ask. How do you envision this evolving? I think, and we’ve got an episode coming up, coming up about this shortly, but the way Corona virus. And I don’t think we’re even gonna have time too much in this episode to talk about coronavirus impact, but it has dislocated some of the, I’ll say the establishment of the anesthesia companies that employ a lot of anesthesiologists and the way that those ownership, the ownership of those companies are structured. And it’s, it’s, there’s flux right now between like big private practices, physician owned groups and even academics. And this whole like ecosystem is, is getting shaken up. So I think there may be an opportunity for perhaps like a Renaissance of, of physician owners. I’m hopeful Renaissance of physician ownership in this space. How do you see that potentially unfolding? And how are you thinking about for your career for your companies and businesses and future RFPs, future hiring staffing, the future of your specialty? How do you see that evolving?
Dr. Aalap Shah (43:41):
So, you know, the honest answer is I don’t really have strong, good answer, you know, at this point it’s very difficult with the frustrations that I’ve told you, you know what we’re trying to get to, ideally just having, again, the physician autonomy, which I just told you, the ability to self-governance compromised. You need to have an understanding of you know, what it’s like to have an individual physician or group of physicians running a group, because, you know, unlike big companies, when you’ve got a small group of people, you got to take their personal lives. My wife’s pregnant. I can’t keep running a group. I didn’t, that’s why I wasn’t going to run this group at his hospital. Know I’m going to keep dealing with issues and phone calls from angry CEOs in the middle of the night. And so, you know, you have to be able to find ways where we have autonomy and we can actually retain our independence and value rather than, Oh, you’re a middleman and we will follow our commands because that’s what most of them are.
Dr. Aalap Shah (44:44):
And so how do we navigate away from that? You know, a lot of it is I’ve always prided myself on value added services. I briefly just mentioned that in a few minutes ago, but like I said, we can come in and be viewed as a qualified staff and solution, or we can actually do other things. So in all my proposals, we talk about supply chain management, which it’s a broad term may have heard about it. And the whole coronavirus outbreak is basically the flow of supplies from vendor, the contracted vendors, until your sense of supply. And from your sense of supply into your anesthesia or workstations, then we talk about we call root cause analysis. There’s a continued quality improvement which is usually done by the hospital anyways, but where you reveal your own cases and you, you review them with your colleagues and you’re like, Hey, your documentation, good documentation practice could be improved here.
Dr. Aalap Shah (45:37):
Or, Hey, we can talk about your anesthetic over here. Or why did you live with this patient a, to say three or knock on wood. If there was an issue with the patient, you and be there doing a root cause analysis, looking at why this error happened. And so a lot of these things are usually taken for granted. You know, again, it’s underbidding hospital, anesthesia groups are not going to have an incentive to do these other things rather than just staff the ORs. And so like doing more of these things, people realize, Hey, well, they see more in their face. You can’t just simply be, you know, someone staffing the, or front desk and a couple of people keeping their head down on the, or if you want to be, you want to save something in the hospital, you have to be walking around entire thing.
Dr. Aalap Shah (46:21):
You have to be networking, introducing yourself, going to medical records and making sure, you know, none of your records are, you know, you know liquid doing those things. I talk to you about talking with engineering about issues and the, or is making yourself seen and know, and that can be very hard because as a group leader that you not only have to propose a salary for your group, for your basic directorship stipend, and then for your clinical involvement, if you work in there, but then you have to be able to bite the bullet and be able to do these things without asking for more money for these value added services. Remember the hospital sees your group as there to provide us the staff, the ORs. They know you have to do these other things, but they don’t expect it really because no one else has really done that.
Dr. Aalap Shah (47:09):
But these value added services are, can really help with longevity. Yeah. but really need to do hundred things. And unfortunately, I hate to say it is the people who tend to keep their head down and, you know, I’m not complaining about us, say our issue in the, or they tend to get away with things. And I’ve seen that, you know, the people who were very quiet tend to do very well in private practice models you know, or even running groups. It’s, it’s something where I butted heads and I am butting heads as I speak with people. But I pride myself on that. I, it was like, I’m going to run a group and I’m going to do this. I’m going to hold myself to fair market value salaries, you know, good treatment of my staff about anything else.
Yeah. Well, it’s been really invaluable hearing your story, your experience. I want to have you back Dr. Shah to just continue this conversation, because I think there’s a lot of really valuable things in here that are it’s it’s information. That’s very difficult to access. It’s so practical and actionable, and these are concepts and ideas that impact every physician working in America, understanding how your group contracts with other groups and there’s yeah, the, the implications are real actual and experienced every day. So I really appreciate your time today. Thanks for joining us here on APM success.
Dr. Aalap Shah (48:29):
Thank you very much.