Mark Reiter, MD MBA FAAEM
AAEM President
AAEM President’s Message: Tenet Wants Emergency Physicians to Subsidize the Rest of the Hospital
Tenet Health, one of the largest hospital networks in the country with 49 hospitals, recently put the contracts out for bid at 11 of its hospitals in California, to replace their emergency medicine (11), anesthesiology (11), and hospitalist (5) groups. Currently, most of the hospitalist contracts and some of the anesthesiology contracts include a subsidy from Tenet, while most of the emergency medicine contracts generate enough revenue through collected professional fees to be entirely self-supporting and quite profitable. According to some of the local groups involved, Tenet made it clear to the large contract management groups (CMGs) it is soliciting that it is looking for a no-subsidy arrangement for all 27 contracts (three specialties at 11 hospitals). Essentially, Tenet wants the profits from the emergency medicine contracts to cover its losses on the hospitalist and anesthesiology contracts. As only the largest CMGs can even hope to staff 27 new contracts at once, it looks like many local emergency medicine, anesthesiology, and hospitalist groups will be tossed out. This situation parallels the hospital-CMG joint ventures I wrote about a few months ago, since it is another attempt by hospitals — like CMGs — to feast on the professional fees of emergency physicians.
In the past, the quality of the care provided by a medical group was of paramount important to the hospital. But for Tenet Health, a for-profit hospital network, it appears that minimizing expenses and maximizing profit trumps everything else. Tenet earned a profit of $387 million in the first quarter of 2014. Perhaps by destroying the medical practices at 11 hospitals, Tenet will be able to cut its hospitalist and anesthesiology subsidies by a few million dollars in future quarters and make its investors happy. Of course, many of these groups have served their hospitals and their communities well for decades and built strong, productive relationships with their medical and nursing staffs. I’ve been told that many hospital CEOs are very supportive of their local medical groups, but the decision to put the contracts out for bid was made at Tenet’s headquarters in Dallas. Tenet’s corporate executives are not so easily swayed by simply providing excellent care — not when there is a chance to squeeze out more profit for investors and corporate officers.